Google Weeding Through 12-18 Months of Motorola Products
It may be a while before we see a new Motorola product stemming from Google's acquisition.
Google Senior Vice President and Chief Financial Officer Patrick Pichette said in an investor call after the company's fiscal 4Q12 earnings statement that Motorola Mobility had no less than 12 months of product pipeline set in place before Google acquired the company in May 2012. That means it may be a while before we see new products from Motorola as Google incorporates this backlog into its release schedule.
"Just a bit of color on Motorola," Pichette said. "We’re not in the business of losing money with Motorola. We’re 120 days into this journey – and we’ve inherited 12 to 18 months of product pipeline. With product restructuring, it does take time for new product to show up. … Be ready for a lot of fluctuation in our P and L [Profit and Loss Statements] over the next quarter. It's just the nature of the beast when you're reinventing a business."
If anything, the news reminds us that although Motorola Mobility will still be its own entity, Google now owns the company, and won't let its new acquisition run entirely on its own without having some input. For Google's Android partners, this acquisition is understandably scary, is it insinuates that Motorola will be preferred over all others simply because it's "in-house".
Despite how the Motorola acquisition may appear to the industry, the company has repeatedly stated that its Android business will be completely separate from its Motorola hardware business. But if Motorola plans to churn out Android based devices, influence from parent company Google seems somewhat unavoidable.
Prior reports have indicated that Motorola will focus on high-end smartphones to tackle Apple's iPhone and mainly Samsung's army of Android devices dominating the market. If Google is only four months into its "journey", there's a good chance we won't see this device appear on the market until the end of 2013. Currently the only "Nexus" devices up for sale are a smartphone offered by LG, a 7-inch tablet by Asus and a 10.1-inch tablet by Samsung.
For its fiscal 4Q12, Google posted $14.42 billion in earnings, but Motorola contributed a $353 million loss to the overall results, or -23-percent of Motorola Mobile revenues in the fourth quarter of 2012. Last year Motorola posted a net loss of $80 million and an adjusted profit of $61 million.