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Motorola Promises More LTE Phones, Tablets

Schaumburg, Ill. – Motorola Mobility plans to launch at least one more 4G LTE smartphone in the second half along with two more 4G LTE tablets, Motorola chairman/CEO Sanjay Jha said during an analyst’s conference call.

The company also plans to launch tablets without LTE by year’s end but didn’t offer more detail.

“LTE will be a strong focus for carriers in Q4,” Jha said, as will tablets. Tablets are “gaining traction” with carriers, and carriers want to get better at tablet sales.

Including the delayed launch of Motorola’s 4G Bionic for Verizon Wireless, which is now scheduled for September availability to consumers, Motorola will have shipped five LTE devices by year’s end, he said.

With the expansion of its LTE portfolio, “good traction” with carriers combined, and expected international sales gains, Jha said he expects a strong fourth quarter for Motorola cellphones and tablets.

Jha made the comments following the release of the company’s second-quarter financial report.

In tablets, Motorola expects sales of its new models to do better than its first model, the Xoom, in part because of more aggressive pricing. The new models, Jha said, are “designed with more aggressive price points in mind” compared to the Xoom. Motorola had less time to “cost optimize” the Xoom because of the desire to bring the product to market to produce a “halo effect,” Jha explained.

The company recently reduced the retail price of the Wi-Fi-only Xoom by $100, with the 32BG version dropping to $499.

In its fiscal second quarter, Motorola shipped 440,000 Xoom tablets in North America and other countries, following shipments of 250,000 in the first quarter, when Verizon’s 3G version became available in late February and the Wi-Fi-only version became available in late March.

Though Jha raised expectations for sales of its new tablets, Motorola offered a full-year tablet sales projection lower than those offered three months ago. The company now forecasts tablet sales of 1.3 million to 1.5 million for 2011, having previously offered a forecast of 1.5 million to 2 million.

Despite the hiccups at Motorola, Jha called tablets a smart move for a smartphone maker because the architecture of tablets is “almost entirely identical” to smartphone architecture “except for the glass.”

For that reason, he said, tablet and smartphone development share a lot of synergy, and tablet development doesn’t have a major impact on Motorola’s costs.

In other product plans, the company is developing two tiers of laptop docks for Atrix-like Android smartphones, one dock for consumers and the other for enterprises, Jha said. Sales of laptop docks to consumers have lagged behind sales enterprises because of price, he said. The laptop dock is a laptop-looking device that uses AT&T’s Atrix 4G Android smartphone as its brain to browse the web and control smartphone apps.

Also because sales of the original laptop dock didn’t go as well as planned, Motorola will also refine its marketing message and make product refinements, Jha said.

With the product portfolio changing and international sales growing, Motorola forecasts a “slight” sequential increase in third-quarter mobile-device unit sales compared with the second quarter’s 11 million devices, which included 4.4 million smartphones, 440,000 tablets, and 6.2 million feature phones.

Third-quarter smartphone sales are forecast to rise on a sequential basis, but third-quarter tablet sales will decline on a sequential basis because of the company’s transition from Xoom to new models, the company said.

Also in the third quarter, the company forecast a sequential improvement in mobile-device operating losses, which came to $85 million.

For the full year, the company forecast companywide operating earnings, combining mobile device and home segment earnings, to be “modestly profitable.” Companywide operating losses in the first half came to $59 million.

For the full year, Motorola forecast combined worldwide smartphone and tablet shipments of 21 million to 23 million, with tablets accounting for 1.3 million to 1.5 million of those units.

In North America, the company admitted its second-quarter smartphone shipments declined from the year-ago period but that North American shipments will rise “modestly” in the third quarter and will ramp up more significantly after that, said president Dan Maloney.