Motorola Mobility bets on Android tablets

Motorola Mobility, the Droid smartphone maker that has formalised its split from Motorola’s enterprise division, is betting on Android-powered tablet computers as it seeks to use a separate stock market listing to claw back some of the ground it previously lost in mobile devices.

Sanjay Jha, chairman and chief executive, hinted after Motorola Mobility rang the opening bell at the New York Stock Exchange on Tuesday that the company’s first tablets using Google’s open-source Android operating system could be unveiled at this week’s Consumer Electronics Show in Las Vegas.

Mr Jha told reporters he saw “tremendous growth” in the nascent tablet market, which has been dominated by Apple’s iPad, citing analyst forecasts that 200m such devices would be sold by 2014. Motorola Mobility would “participate across the tiers” of different size tablets, from 7-inch to 11-inch screens, he added.

Analysts at Jefferies said Motorola Mobility could launch a tablet using Google’s Honeycomb, a next-generation version of Android aimed at tablets, one or two months ahead of competitors.

People briefed on the group’s tablet plans have also pointed to the likelihood that at least one device could lean heavily towards video consumption, tied to Verizon’s FiOS digital pay-television service.

Mr Jha, brought in from Qualcomm in 2008 to engineer a comeback after heavy market share losses to Apple, Samsung and others, expressed confidence in its US mobile business, where analysts believe Verizon Wireless accounts for more than half of all the handsets Motorola sells.

With growing expectation that Verizon will break AT&T’s exclusive grip on the iPhone in the US, and Verizon also supporting a rival Samsung LTE phone, Motorola Mobility is expected to diversify, working with additional carriers including Sprint Nextel, T-Mobile and AT&T.

Shares in both Motorola Mobility rose 9 per cent by lunchtime in New York after its split from Motorola Solutions, which focuses on public safety, data and advanced services for businesses. Shares in Motorola Solutions traded up 0.25 per cent.

The Motorola split, initiated after pressure from investor Carl Icahn, would give Motorola Mobility currency to acquire companies and attract staff, ensure a more consistent pattern of innovation, and simplify the company’s message to investors, said Mr Jha.

“You’ll see a board which is much more focused on understanding technology as opposed to managing a portfolio,” he said.

Jefferies speculated that Motorola Mobility could be a target for Huawei, ZTE or Dell, or could merge with Sony Ericsson.