Remarkably, Motorola Still Viable

Looking over Motorola’s latest earnings, it’s hard to imagine that the company once claimed more than a fifth of global handset sales. Reporting a surprise second-quarter profit of a single cent per share this morning, Motorola (MOT) said it shipped 14.8 million phones last quarter–down nearly 50 percent year-over-year. Its market share fell to 5.5 percent in the second quarter.

Motorola’s explanation for the shortfall? The company doesn’t seem to have one, although it says it’s looking forward to launching a more “differentiated” handset lineup later this year. During a conference with analysts, Motorola co-CEO Sanjay Jha said the company plans to bring a number of devices running Google’s (GOOG) Android mobile OS to market in the months ahead.

“We will have two Android devices by the holidays,” said Jha. “And we have plans for more devices in the first quarter of 2010.” These will get the company “back in the game in smartphones,” Jha added, noting that most of the devices the company plans to launch next year will fall under that category. “Our core strategy really is to take Android as low down on the feature-phone tier as we possibly can,” he said.

For Motorola, which has been losing money and market share for longer than anyone cares to remember, that’s a wise move. A killer Android handset at a reasonable price would do much to carry the company toward its hoped-for turnaround. But as Avian Securities analyst Matt Thornton notes, developing such a device is no easy task when a number of other handset makers are building Android devices as well.

“Motorola made the right choice and the only choice with Android,” Thornton said. “It remains to be seen how Motorola will differentiate itself from its competitors.”