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Rising Sales of Droid Phones Boost Motorola

Bloomberg:

Motorola Inc., the U.S. mobile-phone maker, reported third-quarter earnings that beat analysts’ estimates and a revenue increase for the first time in almost four years on rising sales of its Droid handsets.

I think you can make the case that Android saved Motorola’s mobile phone business. But:

Sales from its handset business climbed 20 percent to $2 billion last quarter, helping to narrow its loss to $43 million from $216 million a year earlier. The division had an operating profit, excluding some charges, of $3 million. Motorola said it shipped 3.8 million smartphones last quarter, beating Thornton’s estimate of 3.6 million units.

Shouldn’t they be more profitable? $3 million in profit is less than a dollar per smartphone sold. What am I missing here?

Thursday, 28 October 2010