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Moto X exciting for Larry Page, Motorola financial performance probably not so much

Larry Page said he's really excited about the Moto X during Google's Q2 2013 earnings call, but the company's recent financial announcements reveal Motorola is yet to become a profitable venture for Google.
July 19, 2013
Rogers Moto X video leak

Google’s CEO revealed during the company’s Q2 2013 earnings conference call that he’s “really excited” for the upcoming Moto X, although it’s not all good news for Motorola, especially when looking at its financial performance.

Page revealed during his remarks that he has been a tester of the Moto X for a while, without specifically naming the device. However, he did not mention any details regarding the announcement of the handset in his prepared speech.

During the questions session, Page was asked about that rumored half a billion Moto X advertising budget but he did not confirm or deny the number. Instead he said that Google is “doing things that are normal for that business,” adding that that “probably too much has been made” about it in the news.

The CEO also hinted that Motorola is an independent company when asked “how Google was walking that fine line between wanting the Moto X to be a success but not such a success that it affects major Android partners like Samsung.”

Motorola, however, is yet to be the successful company Google probably wants it to be. Google CFO Patrick Pichette says that “a lot of progress” has been made at Motorola, but when looking at the numbers you’ll see that the company is still in the red.

Larry Page

Despite being a Google subsidiary, the company is yet to be come a profitable Android player, and the losses continue to accumulate for Google on top of the initial $12.5 billion it paid to acquire it.

In Q2 2013, Motorola posted a loss of $342 million, 75% bigger than its Q2 2012 loss, despite revenue increasing 18% compared to the same period last year to $998 million.

CNET speculates that much of the posted loss may be tied up with the company’s investment in its U.S.-based smartphone factory that will mass-produce the Moto X, and probably other mobile devices in the future.

Motorola has halved its workforce in the past quarter, registering 4,599 workers at the end of Q2 2013 compared to the 9,982 employees that were working for the company at the end of the first quarter. At the same time, the U.S. factory will hire more than 2,000 employees that will be working on those Moto X units.

With the Moto X expected to be a low-cost device, it’ll certainly be interesting to see how Motorola performs in the coming quarters. The device won’t be the only new smartphone the company will launch as three Android-running beasts will join the Moto X this summer, all of them expected to be unveiled by Verizon during a special event next week.