Ina Fried

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Motorola Sees Tablet Sales of 1.5 Million or Less This Year

Motorola said on Thursday that it expects to sell 1.3 million to 1.5 million tablets for the full year, after selling 440,000 devices in the just-reported second quarter.

In providing guidance along with its quarterly results, Motorola said it expects tablet sales to drop in the current quarter as its Xoom faces greater competition from a range of other tablets running Google’s Honeycomb operating system and as it prepares new products. Average selling prices have also dropped, in part as the company has cut prices.

On the plus side, the company said that a growing number of applications are starting to be made available for Android tablets. A mail-in update allowing Verizon Xoom customers to upgrade their device to support 4G LTE, originally due by June, is now slated for September.

Motorola said it expects total smartphone and tablet sales combined to be somewhere around 21 million to 23 million for the full year, with CEO Sanjay Jha saying that it has plans to offer a number of new smartphones in time for the back-to-school shopping season as well as two new LTE-ready tablets later this year.

Jha noted that the company had the benefit of being first to market among Android tablets with the Xoom, but that also posed some challenges.

“You have less time to cost optimize,” Jha said. The new tablets, he said, are designed to be more competitive on costs, adding later that carriers have reacted favorably to the forthcoming products and said that the company should be poised to do better in the fourth quarter.

The company said its delayed Droid Bionic — a dual-core 4G LTE phone — should be in stores in September with another LTE phone also due out before the end of the year.

“It’s my expectation that LTE will be a strong focus for carriers in the fourth quarter,” Jha said, saying that he believes Motorola will have a good position, though he declined to forecast how big that market will be.

Speaking on the company’s conference call with analysts, Jha also commented on the company’s patent portfolio in the wake of investor Carl Icahn suggesting the company consider selling off some of its patents. Noting the company has more than 17,000 patents granted and over 7,000 patents pending, Jha said the company is always reviewing its options. With new companies entering the mobile space, he said, “our patent portfolio in increasingly important.”

Even when pressed by analysts, though, Jha didn’t offer much in the way of specifics. “We will do all that we can to create and enhance our shareholder value using all of the assets we have at our disposal,” he said.


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