Motorola Worries of Overreliance on Verizon/Android

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After riding Android and Verizon to help fuel its comeback, Motorola Mobility is sounding a cautious tone about its reliance on Verizon in the wake of slowing sales. According to Bloomberg, Motorola Mobility said in a regulatory filing late last week that Verizon accounted for 28 percent of sales, up from 13 percent in 2008. The partnership is a concern now that the iPhone 4 has launched on Verizon, causing what appeared to be some weakness in Android smartphone shipments, the company reported last month.

“The loss of, or a significant reduction in revenue from, one or more of these customers could have a negative impact on our business,” Motorola said in the filing.

Motorola CEO Sanjay Jha admitted last month in an earnings call that the Verizon iPhone was apparently prompting a little slow down in sales on Verizon for Motorola ahead of its launch. This is a concern we’ve raised in the past for Motorola. The company has put its chips on Android and, to a lesser extent, Verizon, which is the leading carrier for Android. The question for Motorola is whether Android will prove to be a long-term engine for growth, especially as the iPhone grows beyond AT&T.

To be sure, Android and Verizon have still been a blessing for Motorola. And the company looks to be positioning itself to go after the enterprise Android market with the recent purchase of 3LM, so its exposure to waning consumer sales could be minimized. But Motorola still has a ways to go to prove it can leverage Android for long-term success, something it seems to realize more and more. With the smartphone game increasingly coming down to scale, favoring large vertical companies like Apple and Samsung, it’s going to put even more pressure on Motorola to figure out how to make Android and its carrier partnerships pay off.

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