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Motorola Riding High on Smartphone Sales, Posts First Profit in Years

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SCHAUMBURG, USA – Staging one of the most impressive comebacks of the recent times, Motorola returned to profits after years of plummeting sales and popularity in the rapidly evolving radio communications industry. The manufacturer posted a profit of US$69 million, or 3 cents per share, in the first quarter of 2010, compared to the loss of US$239 million and 10 cents per share in the year-ago quarter.

The turn-around was largely made possible by impressive sales of smartphones sales, in addition to sales of network equipment and lower sales of unprofitable, cheaper phones.

Comparing the smartphone sales, sales revenue increased from US$2 million in the fourth quarter of last year to US$2.3 million in the just concluded quarter. During the same time, sales figures dropped from 12 million in the holiday infested quarter of last year to 8 million in the first quarter this year. The fact that the giant managed to generate more revenue from lower sales hints at large scale market adoption of Motorola’s smartphones.

Armed by impressive sales and the first reported profit in years, share prices of Motorola increased by 3% on the day of press release, marking an overall rise of 18% compared to the share prices in January this year. Not surprisingly, the US manufacturer now figures at the third position behind iPhone from Apple and Blackberry from RIM, on the top selling smartphones in the US. On the global scale, Motorola ranks seventh, well behind market leaders Nokia, Samsung and LG.

Though the manufacturer reported profit in the just concluded quarter, its handset division continues to bleed with a reported loss of US$192 million, but the overall performance is better that that compared to the year-ago quarter, when Motorola posted a loss of US$545 million. The bump in revenue generated has been largely from improved sales in network equipment where the manufacturer posted operating earnings of US$112 million, compared to US$62 million in the same quarter the year before.

With HP acquiring Palm, the smartphone industry is all set for a new revolution and with Motorola returning to profit after revamping its smartphone lineup, the year ahead will see the smartphone heavyweights battling it out with iPhone OS4, Symbian^3, WebOS , Windows Phone 7 and Blackberry OS 6.

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By , Chief International Correspondent on May 4th, 2010 GMT +2


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