Blog Post

Motorola to Sell 600,000 Droids in 2009

Motorola (s MOT) and Verizon (s VZ), thanks to their $100 million marketing efforts, are going to sell some 600,000 Droids during the fourth quarter of 2009, according to Mark McKechnie of Broadpoint AmTech, a boutique research firm. He had initially expected about 200,000 device sales following the launch, but he has upped his forecast: Motorola should sell another 200,000 Droids by Black Friday and 150,000-200,000 during the remainder of the holiday season. This would bring the total to some 600,000 Droids for 2009.

We recently reported the findings of a study from Flurry that indicated Motorola might have sold close to 250,000 Droids in the first week of its availability. McKechnie’s forecast adds credence to Flurry’s findings. McKechnie expects that Motorola will sell about a million Android-based phones during the quarter. That works out to 400,000 CLIQ (also known as Dexter) sales on T-Mobile, Orange, Telefonica and America Movil.

According to Broadpoint AmTech estimates, Motorola should sell about 10 million Android units in 2010 with an average selling price of $286. The company is planning to have about 20 different smartphone models in 2010 and will be selling on most major carriers in the U.S. Each Android unit contributes four times the gross profit of a feature phone unit; those 10 million Android units will contribute nearly half of the gross profits in Motorola’s handset division.

20 Responses to “Motorola to Sell 600,000 Droids in 2009”

  1. Dan Noble

    Lemme see… spend 100 million samolians on hype in the HOPE to sell 600K phones…. this works out to spending 166 bucks per phone…. for a phone that sells for $150. I turn around plan this is not…

    • No – it’s called an investment. The plan is likely that they spend this money to gain momentum for the launch, sell enough to get the phone anointed as the next hot thing, and then reap the benefits of follow-on sales with lower cost of sales. Far too early to call it a success, but also far to early to simply dismiss out of hand.

      Oh – and we don’t know what the split of this investment is between the 2 companies (though perhaps future earnings reports will make that clearer) so it could be that a large chunk is coming from Verizon. Given AT&T’s success at garnering new customers via the iPhone I’m sure that Verizon is hoping to reap some dividends in the form of 2 year contracts (and general consumer inertia that keeps a lot of folks tethered to their carrier).

    • First, the phone sells for $300, with a $100 rebate that less than 50% of people will fulfill. So really they’re making $250 per phone on average.

      And like other Sean said – it’s called an investment. The marketing for this phone was very successful, everyone and their grandma knows about the Droid, and it’s already accounting for 1/3 of Android’s 10% US marketshare. That’s a serious success in my book. Just because you love your iPhone and are scared by real competition doesn’t mean the competition is automatically bad and evil.

      • Perhaps less, resellers like Let’s Talk offer it at $299 with $150 Instant rebate (no mail in required) plus they pay affiliate sites another $55 to $65 per phone. That leaves about $90-$100. And this is on a $39 / month service plan (granted email and web are another $29 / month) and free shiping and who knows what else. It would be great to see a diagramatic breakout of all the consumer cash involved in this scale of roll out and see who in the chain gets what. It is amazing how much money is there and how it gets spread around to intice buyers and motivate resellers and affiliates. This is prestty standard affilate scenario so it doesn’t seem like they did anything special in this realm to promote the phone.

  2. It’s nice to see Motorola making a come back, thanks to Android. I don’t think they stood a chance with their own OS.

    If I am in the market for an Android Smartphone (or an “app phone”) and have to get into a two-year contract, I would find it difficult to make a decision with so many manufacturers and various flavors of Android and custom UIs. There’s always a new Android phone coming out “next month”.

    We will have to wait to see if this is a strength or a weakness for the Android.

  3. “:Broadpoint AmTech, a boutique research firm”

    Translation, they predict what they are paid to predict.

    Nobody really thinks 400,000 Droids were sold to customers. That many might have been shipped to carriers but not sold to customers.

    • True enough perhaps, but let’s just say it’s 1/2 that number. Still not a bad launch. I sense perhaps some Apple defense behind the desire to debunk these numbers and I’m not sure I get it. I would think that the market is robust enough to support multiple, successful device makers and OS providers. If it isn’t then it really isn’t much of a market, no?

      I realize that Verizon/Moto have marketed this as being “better” than the iPhone (a debatable point to be sure), but the reality is that the Droid (and other Android handsets) can succeed without the iPhone failing. As a consumer who just wants the best device for the least money, healthy competition seems like a good thing. I suppose though that if you have a horse in the race then you need to back it no matter what.

      Full disclosure – my wife has an iPhone and I do not (making me occasionally jealous).