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Google Posts Q4 2013 Earnings – Revenues at $16.86 Billion, Losses at Motorola Continue to Pile up

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Google posted their Q4 earnings info this afternoon, showing consolidated revenues at $16.86 billion, which is up 17% compared to Q4 of 2012. Motorola, on the other hand, took in $1.24 billion in revenue for the company, which turned into a loss of $384 million. Overall, Google has missed analyst expectations with earnings of $12.06 a share.

As of the end of 2013, Google had $58.72 billion in cash.

At 1:30PM Pacific, Google will host its typical earnings call webcast, which we have included below. If the financial stuff isn’t your cup of tea, you may want to at least tune in for the Motorola-Lenovo chatter. 

Via:  Google
  • hero

    Love the comments folks are posting for this article. Some really thoughtful comments are being posted here that are clearly making people think, including myself. Really enjoying reading through them, would like to see more of it

  • http://twitter.com/JohnnyACE562 GRAND MASTER SEN$Ei {{-_-}}™

    I guess my next phone will be a Galaxy… {{v_v}}

  • coolsilver

    Moto X was a uninspiring phone. Sure you could customize it…. once the carriers got their collective a$ses together. It was a cool idea which I would went with if it was a top spec phone.

    Then they had to fold to Samsung to keep relevant.

    • iamjackspost

      Have you used one yet? The specs really don’t matter anymore. Do yourself a favor and read about the X8 mobile computing system Motorola is using, it’s pretty impressive.

  • Matthew Arthurs

    Surprised theres nothing here about Google selling Moto to Lenovo… thats pretty big news

  • dwboston

    There’s little more ponderous than tech blogs breathlessly reporting earnings results. Isn’t this why CNBC, Bloomberg, et al exist?

  • anezarati

    im surprised motorola’s loss is *only* $384 million. with all the talk yesterday, i thought it would be more.

    • joejoe5709

      A $384 Million loss compared to their $1.2 Billion income means they spent over $1.6 Billion and if my math is correct that means they overspent/undersold by about 30% of their actual revenue. Sure, $384 Million is pocket change for Google, but that’s pretty bad using only Motorola’s money.

      • MistaButters

        Especially considering that number keeps growing quarter over quarter.

        • akhnaten

          Google sold Moto just as the Moto X platform is gaining momentum. There has not been enough time to see the phone’s impact on the bottom line. Given this amount of loss by Moto, the sale makes even less sense. This really seems like a strategic error on the part of Google management. They should be trying to model Apple’s structure in the market, not kowtow to Samsung’s fears.

          • MistaButters

            Scroll down to the EDNYLaw comment and subsequent thread.

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          • Mike Jones

            How do you know if the MotoX is “gaining momentum” as of now? They don’t release that kind of info publicly nor do you have access to their monthly sales numbers of devices. Stop talking like you are giving facts as they are just ramblings. It makes sense why they sold motorola mobility. They just entered the game on fighting back patent trolls and the patents that motorola mobility had, google couldnt use to protect android as the way the original deal was done up. Now that the patents they NEED to have control over are gonna be transfered to them they will save A LOT of money over the years and protect their market cap.

          • akhnaten

            They wasted $3 billion. Patents have to be defended. They are like a stick, not a shield. They could have gotten them for free if they had bothered to turn Moto into a profitable company. They were in a great position to be in control from the top down, like Apple.
            I know the MotoX was gaining momentum by paying attention to what the people I know were buying and talking about buying. By listening to tech podcasts and hearing what they were buying and talking about. The MotoX was really starting to gain a foot hold in the market. Google just ripped the rug out from under that foot hold.

          • De Nguyen

            Apple’s Structure is what got them in trouble. Moto is in the same boat as Microsoft. Moto X and Surface, mediocre devices that were selling for premium price. You know the story with the surface and now the Moto X is practically being given away. The Moto X platform is gaining nothing.

          • Franklin Ramsey

            The story with the Surface? You mean where the new Surface tablets are selling twice as fast? And the Moto X platform was about customization. They had to roll it out slowly to see just what it could do, but it was gaining. It might gain much faster what with Lenovo being strong in the Chinese market, but I honestly don’t see this as being a good thing for Google, long term.

          • Adrynalyne

            Google and Motorola both knew their first release as Googorola would not be a huge success. How could it be with Motorola being such a non-player for so long? It takes time to build a following and they knew that. Turn the tables and put Samsung (even with their current devices) in the same position. They would have been slightly better off, but only because they have more than one device in more markets (Moto G came in too late to count).

          • Franklin Ramsey

            Exactly, which is why I think they decided to try something new and big that no one had done before. They knew they needed to go slowly. This whole selling to Lenovo, I just don’t get. It really doesn’t make any long term sense that I can see.

          • Adrynalyne

            It doesn’t make any sense to me either unless you consider that Samsung dealings might have had to do something with this.

          • Franklin Ramsey

            Oh I’m fairly sure this was a stall tactic. Google couldn’t get the Moto platform up to speed quick enough to make a dent in Samsung, so stall Samsung from jumping to their own OS as long as possible, while getting the 5th largest smartphone maker in the world to try and chip away some more market share from Samsung.

          • De Nguyen

            Guess you did hear the story about the almost a BILLION dollars hit that Microsoft took on the Surface.
            Moto numbers don’t lie. Please put you feeling a side and read the numbers.

          • Adrynalyne

            Did you read where Surface 2 revenue doubled vs. the first one?

            http://www.forbes.com/sites/panosmourdoukoutas/2014/01/24/microsofts-tablet-strategy-pays-off/

            That was his point, the next Moto X would sell better than the first one and so on.

          • De Nguyen

            The argument is mediocre specs and high price. They (Moto X and Surface) both failed. The Surface 2 is no mediocre product (lesson learned by MS) so it’s not, should not and has nothing to do with this. The Moto X 2 could save us from global warming for all we know, but it doesn’t exist.
            The simple bottom line: mid-range specs and high price will not sell…Unless you’re Apple, but that’s another can of worm.

          • Adrynalyne

            Only geeks concern themselves with specs. The average consumer is concerned about user experience.

            Unlike the first Surface, the user experience on the moto x is good.

            Not that specs drive the better sales of the Surface 2. Product familiarity and marketing makes a bigger difference.

          • Franklin Ramsey

            I did hear the story about the 900 million dollar write off Microsoft made in the first year. I’m referring to the CURRENT numbers, which Adrynalyne was so kind to link to below. I am putting my feelings aside and looking at this logically. Logically, I know why Google was pretty much forced to do it. I just still don’t think it was the right choice.

          • De Nguyen

            The argument is not about the best selling products. You’re talking about orange when the argument is about apple. The comparison is mediocre specs and high prices. The Surface and the Moto X fit that bill. The companies who built them loose revenues. The Surface 2 and “Moto X 2″ is no where in the argument. The Surface 2 is no mediocre product by the way, we’ll just have to wait and see on the “Moto X 2″

          • Franklin Ramsey

            I’m not talking about the best selling products. Moto isn’t the best selling, nor is the Surface. You are sort of right though, I’m making an orange to apples comparison, but not in the way you think. You are arguing that the Moto X has mediocre specs at a high price. Well, right now it is one of the best values for a wireless phone from a spec to price standpoint, but let’s even look at the Moto X’s value from a standpoint of when it was released. Now, I’m going to guess you would say that the Processor and the Screen are the mediocre specs in the Moto X. Let’s think about this from another standpoint. The Moto X has a co processor in it that allows it to do things other flagships still can’t do. They designed an entirely new architecture allowing their processor to process data while their low power co processor processes sensor data. An architecture that Apple as since copied, but still can’t match, Quallcomm tried to add to their snapdragon 800 in the form of Voice processing, but it can’t match it either. So the Moto X has an architecture that others are trying to duplicate, that allows their phone to do things others simply can’t match, all the while running as well or better than other flagship phones, but it is considered mediocre? I don’t see how people can still look at a product that is able to do more than other “high end” devices, but still consider it mediocre.

            Let’s make a comparison. Now this isn’t going to be about smartphones, but it is going to be with computers, so similar products. If you were wanting to play games on your computer and had $300 to spend on a processor, would you go for the Intel one, that can process raw data much faster, but has a HD 4000 chip in it, leaving you able to play your games, just without some features, or would you get an AMD CPU and an add in Video card, allowing you to do more. The Intel chip is the better processor, but the processor alone doesn’t tell the entire story.

          • Sean Elliott

            I really don’t understand what everyone’s problem is with the first Surface, I have one and absolutely love it. Its a hundred times more useful than any generation of the ipad is. The keyboard covers, especially the new ones, are incredibly conveinent and well made. As a grad student just being able to sync all my files between my laptop at home and the Surface and therefore not having to carry around a desktop replacement is amazing. I actually really enjoy some of the UI shortcuts that it has and the battery life is incredible, I guess I don’t see what everyone has to complain about.

          • akhnaten

            Apple makes a fortune selling mediocre crap for premium prices. Moto was in the same boat with the MotoX. Cheap parts + premium price = big profit.

          • shooter50

            the phones impact on the bottom line is nill. Most dont know it exists. It has mid level specs and looks like something from Toys r us. Google wanted the patents, nothing more. The Moto X was a bone for the fanboys

          • C-Law

            Dude u you couldn’t be more wrong about the x. Spend a week with one

        • michael arazan

          Because of BS analyst and Google not making the predicted earnings call, Google stock dropped 20-50 points this morning. Seriously the analyst speculations on futures is such a freaking con.

          • http://www.baldypal.com/ BaldyPal

            It did but it’s already back up. Lowest yesterday was $1,101.22, it’s now sitting at $1,178.60. There is chatter of a split coming. If you were ever going to jump on Google stock, watch it, this may be the best time in the past 2 years to buy.

  • EDNYLaw

    You what’s great (sarcasm) about the US tax structure? Because of the legality of the Double Irish and Dutch Sandwich tax strategies, these “losses” are US losses, which will be used to offset US gains. Google pays somewhere around ~2% taxes on it’s foreign income. Therefore, the vast and overwhelming majority of it’s revenue is made outside of the US (contrary to what the US thinks, the rest of the world is actually a larger place) and the US revenue is relatively small. Therefore, this loss will actually allow Google to pay less taxes because on the share of US taxable revenue, they’ll be able to deduct losses either against capital or ordinary gains.

    tl;dr I guarantee the sale of Motorola mobility was based on stripping them their IP and using the losses to offset gains (which Google is never short on) and reduce their US taxable income to a smaller amount than it already is. That’s a tax attorney’s take on the whole sale of Motorola, take it or leave it.

    • MistaButters

      Forbes did an article basically saying after you count in the tax write offs Google gets from Motorola’s operations losses and the loss in the sale, they will have only paid about $1.5 billion for the patent portfolio. Which is a steal.

      • EDNYLaw

        Man, I was just throwing out speculation of what likely happened. Nice to know I’ve actually learned some stuff after ~$150k of grad school. Yeah, I think Google made a killing on this deal (which by the way, the patents will get amortized and depreciated over their useful life using the income forecast method and Google will be able to recoup basically what they’ve paid for them through deductions, thus only paying $1B for $12.5B of patents).

        Moreover, I really think that Google’s conversation with Samsung to get inline with Google’s vision of Android had a lot to do with this disposition. I’ll bet that Google used its sale of Motorola to a Chinese company, who has basically no market share as a smartphone OEM, to leverage Samsung’s agreement. I imagine Samsung was a little worried that with the success of the Moto X and Google’s ownership of Motorola, Motorola may get an unfair advantage, especially if there were ever a Moto Nexus. This deal probably gave Samsung some reassurance that they will continue to maintain their Android dominance, while giving Google the ability to impose their vision of Android on the largest Android OEM. Further, because of the cross-licensing deals with Samsung, Samsung and Google get to use and benefit from each other’s IP and they benefit in another way that people may or may not know. Many treaties between the US and other countries have beneficial tax rates for royalties paid. Therefore, Google may well have just reduced their 35% tax rate ordinary income to 5 or 10% because of beneficial treaties. Suffice to say, I’d bet Google would have been willing to pay several times more than whatever they paid to the accounting firm that came up with this sale and licensing transaction.

        This is not to say that Lenovo can’t make a go with Motorola. As a testament to that, I’m typing this on a Lenovo Yoga 13 and I really like the laptop. That being said, there are really no Chinese players in the US that rival any other company, though I’m not entirely sure Chinese OEM penetration in Europe and South America.

        Basically, Google made a shrewd financial decision to buy IP to stave off as much litigation as possible and pay as little as possible for it and their share price reflects it.

        Yikes, sorry about the length and depth of this stuff, but I just happen to be sitting in a Structuring IP Ownership class right now and well, there ya go.

        • http://about.me/jovanphilip Jovan Philip

          I won’t speak for everyone, but I certainly appreciate your insight. Cheers!

        • Franklin Ramsey

          Well I’m not sure who you think Motorola was sold to, but it was to Lenovo. Not “a Chinese company, who has basically no market share as a smartphone OEM” considering Lenovo is the 5th largest smartphone maker in the world and is estimating to ship 100 million smartphones this year. Just because they aren’t in America, doesn’t mean they aren’t big.

          http://www.engadget.com/2013/10/28/huawei-overtakes-lg-in-smartphone-market-share-during-q3/

          • EDNYLaw

            Did you read what I wrote? I said they had no market share in the US but I am not sure of their presence in Europe and South America. I’m sure they have a large presence in Asia, but they’re also competing against a lot of other Asian manufacturers like Huewei, ZTE, HTC, LG and Samsung.

            But this basically ensured Samsung gets to remain dominant with Google’s IP backing.

          • Franklin Ramsey

            You made the point that there are really no Chinese players in the US that rival any other company. You realize on a Global scale, which includes the US, Lenovo is the 5th largest smartphone manufacturer. Yes, they would probably like to break into the American markets as they aren’t in them. I’m just pointing out that Google’s decision might not be as shrewd as people might think.
            Google just made an IP deal with Samsung, also made a deal with Samsung for Samsung to get more in-line with Google. With Samsung being the largest smartphone company at this point, what’s to stop Samsung from turning around and saying, “You know what Google? Sorry, we are going to go back to Tizen and release our own App store and services. It will start shipping with the S5, which will sell like crazy still, because we’ve basically become like Apple now.”

            From a phone OS standpoint, you’d have Google going from having the most dominant smartphone OS by sales volume, to having the 3rd largest with all their other OEM partners put together, and don’t think Samsung doesn’t know that. I’m just saying, it might look like a good deal on paper, but what about the repercussions?

          • EDNYLaw

            You realize in licensing agreements they can restrict that type of thing right? None of these transactions are entered into without almost 100% assurity of what either company is going to do within the next few years.

            If Samsung were to renege on some type of agreement with Google to continue on the “Android” path, Google would get a windfall profit. I guarantee there’s some type of liquidated damages clause for breach. I’m sure there’s a common goal plan that Google signed with Samsung in order to facilitate the cross licensing deal.

          • Franklin Ramsey

            Oh, I know that is probably the case, but I guarantee Samsung had the stronger position to bargain from in this matter, and even if there are damages to be paid for a breach of the clause, you do realize Samsung could make that up fairly quickly considering they would still be larger than all other OEMs that Google has backing their OS. That is, if they decided to do it. Trust me, Samsung has the stronger position. I’m guessing the only reason Samsung didn’t just release Tizen, was because it isn’t quite 100% ready. I’m sure Google was OK with the sale of Motorola to Lenovo because they hope Lenovo can build Motorola faster than they can, and take some market share away from Samsung, so Samsung isn’t as tempted to jump to a different OS.

            I still don’t think it was the best choice in the long run.

        • Pedro

          Other than this website, are there any references to the “success of the Moto X”?
          I’ve seen nothing today that indicates anything other than disappointing sales of the device..

          I understand that everything is relative. 2M devices in a quarter can be great. But a quarter with 2M iPhones is sending Wall Street into a tizzy.

          • EDNYLaw

            Maybe, relative success? At least not abject failure. I haven’t really seen the Moto X panned. The Moto G for that matter has pretty good reviews as well. I think that given more time, Motorola’s direction could really put them back into the black because they were actually innovating on the software front instead of cramming better hardware.

          • Pedro

            Maybe I wasn’t clear.
            I haven’t seen any reviews that claim anything other than the Moto X being a technical success.
            I haven’t seen any financial reports that claim the Moto X to be a financial or sales success.
            Shareholders couldn’t care about the first.

          • Adrynalyne

            You mean a loss of 3.7M in a quarter, right?

            Apple sold 51M iPhones in Q1(fiscal).

            2M iPhones in a quarter would be Wall Street amageddon.

          • Nikuliai

            it’s the top selling device in my country

        • shooter50

          The SUCCESS of the Moto X?? I can’t stop laughing at that one

        • NY One

          “but I just happen to be sitting in a Structuring IP Ownership class right now”

          Well you might want to pay more attention in class because your response is way off base.

  • John Legere

    What’s the profit?

    • bobbyg

      coulda shoulda woulda

      • John Legere

        Blahblah

    • trixnkix637

      I should’ve invested in Netflix when it was 80 and less..

  • Franklin Ramsey

    This whole Google selling Motorola to Lenovo has me wondering about the corporate motto “Don’t be evil.” Selling off a company that was just starting to do “right” just seems evil.

    • AbbyZFresh

      That motto was completely over once they went public in 2004. It’s all about appealing to the shareholders.

    • http://hearthstonehungary.hu/ Bence Borovi

      I would sell that too as quick as possible.
      “loss of $384 million”
      worse than in 2012 q4…

      • John Legere

        But “$58 billion” in cash.

        • http://hearthstonehungary.hu/ Bence Borovi

          Yes I know, but if you lose money on something in every quarter, you might realise that something isn’t right, so either change everything(happened in 2013 august and we all thought now Motorola is better) or sell.

          • Franklin Ramsey

            But at the end of the day, they are trying to release devices and they make money in advertising. The more people that use their devices, the more money they make. If they would have added in the advertising revenue they made off the Moto phones that were sold, that Loss would have been less. It’s like Amazon selling hardware at a loss to get people into their ecosystem. In the case of Motorola and Google, Google kept the numbers separate so we have no idea what the effect was.

    • WickedToby741

      It’s still a business and it has to operate like one. Even if you loved what Motorola was doing, if the losses were still mounting and they were compromising Google’s relationship with other OEM’s, namely Samsung, then it was time to let go. The shear amount of devices Samsung sells is not insignificant to Google, and if Motorola was jeopardizing Samsung’s commitment to Android, then the Android ecosystem as a whole is better off this way. I don’t like it either, but they have to make decisions that will ensure growth and sustainability in the future. It’s not good or evil, it’s business.

      • Franklin Ramsey

        I understand that is still a business, but for a business that has a corporate motto of “don’t be evil” they seem to have forgotten that. I’ll be hopeful that Lenovo doesn’t change Motorola, but think of it this way, lots of people use Google services, at this point. Samsung might be the biggest producer of Android out there, but unless Google does something to get the other Android makers in the game, Samsung is going to roll over Google anyways. What’s to stop Samsung from moving to another OS at this point? Nothing. Now, Google has no hardware manufacturer out there to keep it’s vision going forward. With Motorola, Google had more leverage than without them, hence why I think Samsung wanted them to sell Motorola.

      • Nikuliai

        Thing is, and I may just be paranoid, Samsung has been working on Tizen for a while, so I’m starting to think that Google Made Motorola work on a “new image” with the Moto X and after -logical- “meh” sales (which still makes the other OEMS a little nervous) throw in a “market destroyer” (Moto G) that made the OEMS freak out, they negotiate with Samsung and “get forced” to get rid of Motorola so Samsung puts Tizen on Hold… Google gets back a little more money and keeps his biggest OEM in line right now (even working with a more vanilla Android now)…

        May sound like a paranoid, but honestly that is the only way I see this as a good sale, a little part on a big scheme, and the people on google may be a lot of things, but they are not stupid. Either way the only one losing right now is Motorola, but let’s hope they keep the same formula at least a couple years (and hopefuly the name, Lenovo as a name kinda sucks)

        PS: either way… go to hell Larry Page ¬_¬

    • Seth Kwon

      While so popular among the enthusiast community, they only shipped ~500,000 Moto X after launch, compared to 10 million in a month after SGS4 launch. Doing “right” doesn’t necessarily result in doing “well”.

      • Franklin Ramsey

        I don’t think people are looking at the big picture. With Motorola, they had more leverage to push their system and services. It is like the bent over to the will of Samsung. Google needs more Manufacturers making Android phones. Samsung is the largest one, and if they keep this up, what’s to stop Samsung from releasing their own OS (like they are already planning)? If/when that happens, what is Google going to do? HTC, LG, and others are already branching out to other OSs too, trying to gain market share. Google had one company making great phones that showed their vision. Now, they only have the Nexus program.

        • AbbyZFresh

          The Nexus program is just as good as what Motorola did though. It was simply cheaper.

          • Franklin Ramsey

            That’s just the point, the Nexus program isn’t just as good. It relies on Google having a manufacturer willing to partner with them to make it. It’s not nearly the same as having the ability to make your own hardware. Look at the innovation that Motorola had vs. the Nexus being a trimmed down G2.

          • Seth Kwon

            With Android market share at this point, it will be hard for other OEMs to depart Android for a while. Google will keep innovating, strengthening its market position further, while OEMs possibly look for alternatives. MS is doing just fine with their Windows without owning a HW division (in terms of m/s, not their failed launch of Windows 8).
            I get your point, but I’m sure they’ve done all the analyses and figured having Moto just doesn’t economically and strategically make sense for Google to keep. Moto products have changed since Google acquisition, but operating a HW business does not only relate to putting fine products to market, but also operating all sorts of verticals in manufacturing, from supply chain management to marketing to sales. That’s just not Google’s expertise just yet.

          • Franklin Ramsey

            I think you are missing the fact that fewer than 1.5 billion people on the planet have a smartphone currently. If there were a low cost smartphone running another OS, market share could quickly change, hence why so many Android manufacturers are trying to get into the low end market. It could potentially be easy, and very feasible for OEMs to depart Android. Look at LG or HTC as examples. HTC is looking into making phones with the new China OS on it. LG is looking to make their own OS and making phone with Firefox’s OS on them. Microsoft just bought a HW division in the form of Nokia to strengthen their position!
            I’m thinking that Google didn’t do nearly the analyses you think they did, but bowed to the wish of Samsung as they are their largest OEM partner at this time, selling more than Apple. Samsung is the 800 pound Gorilla in the bunch, and I’m fairly sure Google didn’t want to upset them or have Samsung decide to go all in on their own OS while the services wars are still just beginning.
            As for Google operating all sorts of Verticals in Manufacturing, I think you are missing the point. Google is headed more and more in that direction. Buying Nest, Robot development companies, and Home solutions. Google Is getting to the point where they are making their own hardware and Motorola has expertise in that field! Look at Moto Maker. No one else has pulled that off yet, and that would be huge with Project Ara coming!

          • Blue Sun

            I think you put too much faith in Project Ara.

          • Franklin Ramsey

            I think you don’t quite understand what Project Ara could mean. If it even gives us half the customization options that it is trying for, it would be like a user being able to pretty much get a phone exactly how they want it, and buying module upgrades to keep their phone with the newest specs. If it reaches the potential the concept videos show, anyone can basically have the exact phone they want. If they want a better camera in their phone, buy the module without having to buy an entirely new phone.

          • Blue Sun

            I do understand that this project has a huge upside. I just don’t think it see the light of day in the next 5 years. I think the project as a whole will not yield a better product, nor a cheaper product for the end user.

          • Franklin Ramsey

            Well, if Dennis Woodside is to be believed, there could be more customization coming to the next set of Moto phones. Such as memory or screen size. I think Google would have been able to develop it much quicker with the Moto X platform, but I could see the fruits of this project coming in the next year or two. We might not see a full fledged modular based phone for 5 years, but this could be a cheaper solution over all. You buy the part and piece you need. Just like when the Desktop market first started out, you could build a PC with better specs than you could buy for the same price.

          • Seth Kwon

            You’re missing the point that it’s not just about the OS. It’s much more about contents these days and not many, if at all, post-generation OSs are going to be able to match what iOS and Android offer. All Google has to do is simply not letting other OSs run Android apks.
            Regarding MS, I was talking about their PC OS. To MS, mobile is still sort of a new business (although they had Windows phones before).
            I still think it was more of Google’s decision rather than Samsung pressuring Google to get out of their handset business. Samsung could have if Moto was becoming a huge hit, but it sucked before Google acquisition in terms of sales and it still sucks. Samsung would care more about freaking Huawei than Motorola. Consumers don’t give crap about vanilla Android vs. skinned Android – most of them wouldn’t even know they have an Android phone.
            Agree Google may be heading to HW direction more, but can’t agree on Motorola being an expert as an OEM. Moto Maker? Samsung could’ve easily done that if they were selling to one market and just 1-2 models.

          • Franklin Ramsey

            I think you are missing the point. Google doesn’t control Android. It is an open source OS, hence why there are forks that exist (like Amazon’s). Google can’t say no other android version can run apks, they can just say the play store won’t work on it. Think of if Samsung all of a sudden decided they were going to use only Tizen. I’d pretty much guarantee they would keep a majority of their market share and still be the number 1 smartphone maker in the world, but they might fall to number 2 behind Apple. If Samsung makes that change, from an OS perspective, Google is screwed and trust me, Google knows that. If Samsung did that, Google’s OS market share would drop into third place behind iOS and Tizen, cutting their service revenue drastically and their content reach.
            Also regarding Microsoft, they still have a HW division regarding their PC OS. It’s what is developing the Microsoft Surface brand.
            There is no way I don’t see this sale as being anything than appeasing Samsung in some way. Think about what Google was doing with Moto. They were breaking the Customization barrier. They had to do that slowly. If they had a run away hit, they didn’t have the manufacturing facilities to handle really high volume. If/When Google got Moto Maker up to speed, it could have been huge. through Project Ara in the mix and you have a platform to give anyone in the world, exactly the smartphone they want. And you don’t see Motorola being an expert as an OEM? They have literally sold hundreds of millions of phones. They used to do Radios and all sorts of other equipment too before being split off. Are you forgetting that Motorola was selling 100s of millions of Razrs when they were flip phones each year? And Samsung could not have done Moto Maker at the volume they sell their phones. They don’t have the facilities to do that at the volume they sell phones. Samsung starts manufacturing their phones a month or two before release so they have the millions of phones they know they will sell at launch. So if they can make 4-5 million phones in a month, and they decided to do customization with their phones, they’d be backlogged forever at launch considering they sold 10 million S4s in less than a month. Samsung can’t do anything like Moto Maker at the volume they sell phones and they know it.

          • Seth Kwon

            You’re just trying to refute everything. What’s Surface sales numbers compared to all other PCs and laptops? How long has Surface been around since Windows existed?
            You didn’t read the last sentence of my previous comment. Samsung can’t do it obviously, they sell all over the world with all these different carrier HW, SW customizations. There’s no way they can customize outlooks from few facilities in Korea, China and maybe India. Don’t tell me you believe Google can deliver customized Moto Xs all over the world within 4-5 days if their production and sales got up to speed. They could’ve done it because they were just selling it here in the States. Otherwise they would have to do a series of asset acquisitions to set up manufacturing in other continents.
            You’re not comparing apples to apples. Samsung can do everything like Moto Maker if they focused on just one market with one model. Google can’t do anything like Moto Maker assuming hypothetical success of Moto X in other markets.

          • Franklin Ramsey

            I’m not just trying to refute everything. I’m pointing out what you are saying isn’t correct.

            And I did read your last sentence. I’m saying Google couldn’t, Samsung couldn’t, no one can. At least not yet. That is what Google was building up to. Hence why they started selling in the UK. They knew they had the capacity, so add a market. Google couldn’t do it all at once either, hence why I am pointing out they were building up the platform.

            And I am comparing Apples to Apples. Samsung could do everything like Moto Maker if they focused on one market at a time, like Google was doing. Google could do the mass success of Samsung too if they had the time like Samsung did. Samsung didn’t start out over night and it wasn’t till the S series they started getting big.

        • MistaButters

          I guarantee the Nexus 5 outsold the Moto X.

          • Franklin Ramsey

            Again, not the point. Look at the innovation Google could push with Motorola vs. the Nexus basically being a stripped down G2.

          • blix247

            Of course, its available world wide. How about just in the States though, are you still so confident?

          • Adrynalyne

            Not sure we will ever know with Google not telling us how many sold. However, I would automatically favor the one in more carrier stores.

        • Nikuliai

          The Nexus brand is most likely gone with this Samsung/Google deal (which sucks, but that’s the most likely scenario)

      • Adrynalyne

        Its all relative.

        Apple sold 9 million iPhone 5s and 5c their opening weekend. Just the weekend! They aren’t gaining marketshare, either.

      • Nikuliai

        dude Samsung has 80% of the Android share… and Android has 80% of the smartphone share, that means Samsung sells 64% of ALL THE SMARTPHONES IN THE WORLD, do you seriously think they expected to top that with their first smartphone?, this phone was destined to have a low shipment, it was only sold in like 4 countries at the start, and only one with Moto Maker, they were just testing the strat

        • Adrynalyne
          • Nikuliai

            my bad, I guess I mixed up the numbers, thanks :)

            anyway, it’s still 63% of the Android Market and 50.4% of the total Smartphone market, it’s insane to think Motorola would compete with that with a phone that’s trying to change the way people perceive smartphones (and there are still TONS of people that think that specs are everything and look at you like zombies when you show them that the Moto X is actually faster than a Quad core)

          • Seth Kwon

            That is kind of my point. Samsung wouldn’t even care about Moto and Samsung knows there’s no way Moto can do Moto Maker in a foreseeable future. I was just telling Franklin Ramsey that Google’s disposition of Moto was probably more about the economics, less about the strategies with regards to Samsung.

  • ToddAwesome

    I love some good GAAP talk.

  • Philip J. Fry

    Definitely want to hear more about this motorola – lenovo thing.

  • AbbyZFresh

    Google deserves missing expectation estimates after what they did to Motorola yesterday.

    • John Legere

      I doubt one day did that to them.

    • PoisonApple31

      Could have hit those expectations if they got rid of Motorola sooner! /s