Motorola Droid X, Droid 2 Lead to $109M Profit

Motorola's Android-based Droid X and Droid 2 helped buoy the phone maker to a $109 million profit for the third quarter. Revenues hit $4.9 billion, up 13 percent from Q3 2009.

Motorola's bet on Google's Android operating system paid off again in the third quarter, as the company reported a $109 million profit well above the $12 million earned in the year-ago quarter.

The phone maker's revenues hit $4.9 billion, up 13 percent from a year-ago. Motorola's stock rose to $8.71 from the previous close of $8.09 on the news.

Motorola's mobile device segment sales topped $2 billion, up 20 percent from a year ago and reaching profitability for the first time in more than three years, Sanjay Jha, Motorola co-CEO, said in a statement.

These sales were helped by the 3.8 million smartphones Motorola shipped, led by the Droid X and Droid 2.

"Droid X continues to sell extremely well, and we have had several other successful smartphone launches globally, including the Droid 2, the Ming series in China," Jha said.

Just a few short years ago, Motorola was getting beaten by Samsung handsets, Apple's iPhone and others in the market and made a strategic decision to leverage the open-source Android platform.

Motorola in November 2009 launched the inaugural Motorola Droid on Verizon Wireless' network and has enjoyed a steady climb in sales, units shipped and profits since.

The company went on to release the Motorola Droid X and its Droid 2 sequel. The Droid X followed the HTC Evo 4G from Sprint by offering a 4.3-inch screen for multimedia play; the Droid 2 offered users a faster Droid with a better slideout QWERTY keyboard.

Motorola's biggest bests may come in the fourth quarter, when it plans to roll out the Droid Pro on Verizon's network, along with five other devices as part of its holiday lineup of Android smartphones.

Designed for enterprises, the Android 2.2-based Droid Pro includes remote wipe of device and SD card and complex password support.

The Motorola Citrus and Spice, both based on Android 2.1, are lower-end models with a focus on the environment.

The Android 2.1-based Flipout and Flipside, cousins to the Motorola Backflip, will also be available in Q4 this year on AT&T. The AT&T Bravo provides the encore with a 3.7-inch display.

Despite Motorola's unqualified success with Motorola, analysts for Jefferies and Co. believe Motorola's reliance on Android can be a competitive disadvantage because Samsung, HTC and others can "tap into the same ecosystem."

Moreover, they said Motorola's development and manufacturing remains at the mercy of Android's release schedule.