Motorola blames stiff competition and patent wars for its declining sales

Motorola revealed on Friday that tough competition among the mobile carrier companies and the ongoing patent wars are affecting its sales and profits. The company stated that its sales for the last quarter of the year 2011 were less than expected. Motorola’s sales and a modest profit on non-GAAP basis estimate to be around $3.4 billion which fell short of $3.9 billion in revenue expected by the analysts at Reuter.

Motorola seems to be blaming the tough competition among mobile companies and the ongoing patent wars between them, particularly those with Apple Inc. The company announced the details of its mobile handset sales, which revealed that the number of handsets sold in this quarter were 10.5 million, among which 5.3 million were smartphones. More details will be given when the full earnings report of the company is made public on January 26, 2012.

Like other companies, Motorola also uses Google’s Android as the operating system for its smartphones. Motorola sued Apple for violating 18 different patents owned by Motorola and accused Apple of using Motorola’s technology for its iPhone, iPad, iPod Touch and its Mac line of computers. Soon after, Apple returned fire by filing two lawsuits against Motorola and accused it of using Apple’s multitouch technology for its Droid smartphones and other mobile phones.

Ever since then, the patent wars have been going on with both the companies going in and out of courts all over the US and outside US as well. Owing to its long stay of 80 years in the field, Motorola owns among the largest patent portfolios in the industry and it has also been speculated that the patent profile was the main asset which attracted Google to Motorola. Early in the month of August, it was announced by Google that it would buy Motorola for a huge sum of $12.5 billion.

However, regulatory approval is still pending over this acquisition. With over 17,000 approved patents and an additional 7500 patents pending, Motorola’s portfolio is expected to help Google significantly in its worldwide fight against Apple, who is currently suing companies left right and centre for patent infringement.

Motorola hasn’t been able to capitalize recently on its hugely successful Droid brand which had marked a revival for the company, though the Droid Razr is doing quite well. Other companies like HTC and Samsung have had bumper quarters in the past year, whereas Motorola has displayed sluggish growth. It remains to be seen whether it will turn out to be a fruitful investment for Google in the long term.