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Love is a beautiful thing.
It's been just over three months since Google (Nasdaq: GOOG ) closed its acquisition of Motorola Mobility. That's sufficient time for the lovebirds to consummate their union and begin conceiving new devices -- and conceive they did. Googorola has now revealed its first-born to the world -- and surprise!
The birds and the bees
You see, kids, when a dominant search engine and Internet-services company and a struggling, unprofitable mobile-device OEM love each other very much, the best way for them to express how they feel about each other is through a $12.5 billion acquisition. That's sometimes how new companies and devices are born.
Source: Motorola Mobility.
Let's go ahead and welcome the newest additions to the family: the Droid RAZR HD, Droid RAZR Maxx HD, and Droid RAZR M.
It's a Droid!
The Droid campaign first started by Verizon (NYSE: VZ ) has been incredibly successful in bolstering the Android brand within consumers' minds, so it's unsurprising that Googorola and Verizon are again teaming up for another go-around. CEO Dennis Woodside said the trio highlights some of Motorola's competitive strengths, such as experience with incorporating 4G LTE into its devices, beefier batteries, and always being all Android, all the time.
Motorola has never built a Microsoft (Nasdaq: MSFT ) Windows Phone device, and now that the OEM flies Google's multicolored flag, don't expect it to ever do so. In fact, the last time it was even discussed was last August at a technology conference, when Motorola's then-CEO, Sanjay Jha, said he was "open" to hooking up with Mr. Softy. This might have been a disingenuous claim, since exactly five days later Google and Motorola announced the acquisition. I doubt Google called up out of the blue and the two completed the deal in less than five days.
Here are some basic specs on how the three models stack up.
Droid RAZR M
Droid RAZR HD
Droid RAZR Maxx HD
|Display||4.3-inch AMOLED||4.7-inch AMOLED||4.7-inch AMOLED|
|Battery life||20 hours||24 hours||32 hours|
|Cameras||8-megapixel (rear), 0.3-megapixel (front)||8-megapixel (rear), 1.3-megapixel (front)||8-megapixel (rear), 1.3-megapixel (front)|
The RAZR HD is going to be the company's new flagship. Nokia (NYSE: NOK ) happened to unveil a new flagship on the same day, the Lumia 920, only to see shares tank by as much as 15% as investors weren't impressed. We'll see whether Moto will fare better.
The weakest link
The company is also making an attempt to address one of Android's most widely cited criticisms: fragmentation. Historically, Motorola's track record with timely software updates has been spotty at best, frustrating Android enthusiasts eager to upgrade to the newest version of Android.
Under Woodside, Motorola is now committing to timely software updates and vowing that "most" handsets released since last year will get an upgrade to Android 4.1 Jelly Bean. Taking it a step further, any user who isn't eligible for the upgrade will receive a $100 credit toward any of the new smartphones unveiled today.
That may not fix some of the platform's fundamental weaknesses, but it's quite a step in the right direction and a gesture that consumers are likely to appreciate.
Who brings home the bacon?
Motorola wasn't doing too well on its own, and being swallowed by Google hasn't exactly changed things overnight. Its last public earnings announcement as a standalone company saw an operating loss of $70 million, and its first release after becoming a Google subsidiary revealed another $233 million in operating losses, primarily from the mobile segment.
One difference is that Google has a lot more cash for Motorola to burn through -- $43.1 billion versus $3.5 billion. That at least relieves some of Motorola's pressure to become operating cash flow-positive.
Three and counting
Some analysts have criticized both Nokia and Motorola for their timing of their events, since Apple (Nasdaq: AAPL ) is gearing up for its iPhone unveiling next week. That event will surely overshadow any attention its rivals muster up. Revealing devices so close to the iPhone substantially raises the bar for what the companies must show off to impress investors and consumers, a bar that Nokia obviously failed to clear since its shares tanked.
It's only a matter of time before Google taps Motorola to build devices with integrated hardware and software, a broader trend within the industry after Apple showed everyone how it's done. Google's already doing this to an extent with the Nexus 7, and Microsoft as well with its Surface. Google knows firsthand how well the Nexus 7 is faring, which will probably spur it to pursue more integrated devices.
This was the first-born, but it's certainly not the last.
With the iPhone 5 being unveiled next week, investors had better read up on Apple before it takes the wraps off the newest model. As a bonus, I've written a comprehensive report all about the iPhone 5 that's now included as a perk in our premium ticker report on Apple. In it, you'll find a detailed breakdown of critical components expected in the iPhone 5 and how to profit on it. Grab your copy today.