Market Overview

MOT Needs Something In The Palm Of Its Hands

Share:

According to an article by Om Malik on BusinessWeek.com, Google’s announcement of its Nexus One phone brought three companies into the picture - Qualcomm (NASDAQ: QCOM), which would provide the chips, Google (NASDAQ: GOOG), which would make the OS and Taiwan-based HTC, the preferred device maker. But what about Motorola (NYSE: MOT)? Wasn’t its CEO Sanjay Jha betting on the Android?

During the launch of the device, GOOG tried to portray that it was not giving a cold shoulder to MOT. Hey, the search giant even got Jha to not only attend the unveiling, but say a few words on stage. Who didn’t notice the fact that Jha was late? He actually cited traffic as the reason for his delay.

Malik says in the article, “Well, paint me cynical, but guys who have corporate Gulfstreams at their disposal don’t get delayed in traffic unless they want to. More importantly, his onstage body language made clear that Motorola wasn’t too thrilled about the Nexus One, especially after publicly betting the farm on Android.”

Moreover, Verizon’s (NYSE: VZ) answer to the Nexus One is scheduled to be available shortly. This would definitely hit the performance of Droid, which is made by MOT. Analyst Mark Sue of RBC Capital Markets said in a research note that Motorola is estimated to have sold 12.5 million mobile devices in Q4 2009, short of the prior estimate of 13 million devices.

What should MOT do now? Malik says, “What Motorola needs to do is take a page from the Apple/RIM playbook and get vertically integrated.” For this, MOT should acquire Palm (NASDAQ: PALM), which has a great OS. “Palm needs scale, while Motorola needs software,” Malik elaborates. This may be the only way for the handset maker to take control of its own destiny.

Read more from media.

Posted-In: BusinessWeek Om MalikMedia Trading Ideas

 

Related Articles (GOOG + MOT)

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial
Book A Demo
Learn How You Can Succeed In The Market With Benzinga Pro

Fastest Market News

Real-Time News Alerts

Customizable News Filters

Book A Demo

Two Market-Shaping Events That Will Have An Impact On Stocks

Did Hudson Castle Facilitate Fraud at Lehman?