Motorola Mobility is planning to make tablet devices in two different sizes, Chief Executive Sanjay Jha said Wednesday.
Jha has previously voiced interest in the tablet space, but offered a few more details during an investment bank conference. Motorola Mobility will make both a 7-inch and a 10-inch tablet because “we view both formats as being quite meaningful,” Jha said.
Schaumburg-based Motorola will spin off Motorola Mobility on Jan. 4 as part of its planned separation into two publicly traded companies. Jha, who currently shares the CEO title with Greg Brown at Motorola, will lead Mobility, overseeing mobile devices and television set-top boxes.
Jha said his company’s research and consumer testing show that a 10- to 11-inch tablet is seen as a business-centric device, while a 7-inch device is “more fun.” He added that a 7-inch tablet is also “much more amenable (than a larger device) to be carried in different forms, women’s handbags and so forth.”
Even with so much industry interest in tablets, Jha said his priority for mobile devices will remain smartphones.
“I believe smartphones are the computer,” Jha said. “They’re the computer you carry with you at all times. We’re planning to participate quite fully in (the tablet) category, but smartphones are still way larger volume and more important because each of us carry it with us at all times.”
Jha also looked ahead to the first quarter of 2011, acknowledging that the mobile devices business will likely post a financial loss, albeit a smaller one than the same quarter of 2010. The handset business generally sees a seasonal dip during the first quarter, and Motorola is also expected to face a new threat early next year: the arrival of Apple’s iPhone at Verizon Wireless, where Motorola has enjoyed high visibility and strong sales this year with its Droid smartphones.
While not naming the iPhone, Jha acknowledged “a competitive dynamic developing” at Verizon that could have an impact on Motorola’s results. Motorola is working to diversify its product portfolio in the U.S. by having stand-out devices at other carriers besides Verizon, but the timing of this diversification strategy and the expected launch of a Verizon iPhone will still generate a first-quarter loss for mobile devices.
For the entire Motorola Mobility business, Jha said he expects “we will be in a very narrow range around break-even” because of an improvement in earnings for the Home segment.
Too little, too late.