The fight for the global share of mobile phones is intense. And Motorola
An example of getting share at the expense of profits? Not really. Motorola had a stellar quarter, generating net profits of $933 million, up from a $203 million loss a year ago that included a large restructuring charge from its semiconductor business. Income from continuing operations, net of restructuring charges, came in at $947 million, while in the year-ago period the number was $619 million. During the second quarter, revenues increased to $8.83 billion from $7.54 billion. Motorola had given the Street guidance of $8.3 billion to $8.5 billion in revenues.
Not long ago, Motorola looked like a tired business. Why the resurgence? It appears to be the result of its new CEO, Ed Zander. He did the typical restructuring (cost-cutting, improved operations, and so on) but also allowed for much more innovation. That is, as mobile phones become mainstream, it becomes increasingly important that they are fashionable. So Zander has been working hard on the "cool" factor.
And it appears that Motorola struck gold with its new Razr phone. In the second quarter, the company sold roughly 5 million units.
The success is taking a toll on the competition, such as Samsung Electronics and LG Electronics, both of which posted very weak quarters.
Can Motorola keep up the pace? The good news is that the company is in the midst of major product releases, such as the Slvr, which has a sliding keypad, and the Pebl, which has a cool round shape. But, of course, the one that's getting big buzz is the Rokr. It will play music using Apple's
Yes, in tech, even tired companies can be cool again. That said, those companies might well become uncool just as quickly. Not long ago, Motorola experienced ailing results because of lackluster product releases. The fact remains that consistent innovation remains an occupational hazard in Motorola's operational sphere.
Fool contributor Tom Taulli does not own shares in the companies mentioned in this article.