It's hardly a secret that Motorola's future as a company depends heavily on how well their new line of Android smartphones does in Q4 2009. Their sales in Q2 of this year were down almost 50% since 2008, and Android seems to be the hope they've pinned their glorious rebirth on. That's why the news that AT&T has cancelled their plans to carry Motorola Android phones (thanks, TheStreet.com), is so bad for the ailing company.
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Apparently Moto's plan was to convert WinMo phones over to Android and sell them through AT&T. Ma Bell didn't like that plan and complained that the phones were too outdated to sell well. Now Motorola is going to have to trust to its two remaining carriers to give its new line of Android smartphones the exposure they need to blossom. T-Mobile and Verizon are likely to be the carriers Moto's been referring to, although nothing will be announced officially until the Sept. 10 Android event.
So how much does losing AT&T as a carrier hurt Motorola? It's certainly not a good thing, but I don't think it's going to end up being as much of a blow as others have been making it out to be. Yes, AT&T is a huge carrier that's shown substantial growth as of late, but much (if not most) of that growth has been due to the iPhone. Those customers are not going to switch over to Motorola's lower-end Android smartphones anyway.
While it's true that Moto needs as many potential sales as possible to lift their business out of the muck, I think that T-Mo and VZW are much more valuable partners than AT&T. Both of them have oodles of customers looking to upgrade from their old 'feature' phones to smartphones. The Motorola Morrison, which is billed as being a cheap, budget smartphone, could be just the phone needed to entice these people into the world of smartphones.
Motorola isn't out of the woods yet, and AT&T backing out is certainly bad news for them, but I wouldn't count them out quite yet. They've got some of the best phone designers in the world, and they seem to have a good idea of what is attractive about Android. I think it's possible they just might surprise us all.