Motorola Mobility (NYSE:MMI) reported weaker than expected sales of its Android smartphone and tablet units for its third quarter, including 4.8 million Android smartphones and only 100,000 Xoom Honeycomb tablets.
Motorola, which is in the process of being acquired by Google (NASDAQ:GOOG) for $12.5 billion, reported earnings of $3.26 billion on 12 cents per share. While this was an 11 percent boost from a year ago, it fell short of Wall Street analysts' consensus of $3.37 billion on 6 cents per share.
Motorola boosted smartphones sales by 9.1 percent for Q3, as sales of its first Atrix handset, the Droid 3 and other smartphones grew by 400,000 units. Jefferies & Co. analyst Peter Misek had been modeling Motorola to report sales of 5.1 million smartphones for the quarter.
The weaker-than-expected showing could mean the company won't meet its projected target of 21 million to 23 million smartphone sales for 2011, noted Susquehanna Research analyst Jeffrey Fidacaro, who was expecting 5.5 million Android sales and suggested that the company lost 30 basis points of worldwide smartphone market share to Samsung, HTC and others.
However, Fidacaro also allowed that Motorola could get a nice boost in the fourth quarter from full quarter sales of the high-end Droid Bionic handset, as well as the launch of the Droid Razr, a 7.1-inch-thin Android handset that will go on sale Nov. 10.
At 100,000 units, Motorola's Xoom sales were atrocious against even the company's own Q2 sales of 440,000 Xoom slates. By comparison, Apple sold 11.1 million iPads in its third quarter. Misek, who had been expecting 300,000 Xoom unit sales, said HP's $99 TouchPad firesale hurt Motorola.
The tablet maker even launched a 4G LTE Xoom in September and a discounted "family edition" Xoom earlier this month, but failed to spark sufficient interest for the first Honeycomb tablet in the market.
While Motorola is reportedly working to roll out two new 4G LTE Xoom machines this holiday, it won't get any easier for the Xoom.
Misek also expects Amazon's Kindle Fire to squeeze the Xoom in Q4. The Fire, which will launch Nov. 15 for $199, could sell up to 5 million units during the holiday season.