After postponing the launch of their much-hyped 4G smartphone DROID BIONIC, Motorola Mobility Holdings Inc.(MMI) recently unveiled its new smartphone Motorola PRO+. The new device is powered by Android 2.3 operating system and supports both touch screen and QWERTY keypad.
The new handset is slated to be released in the beginning of the fourth quarter of 2011 targeting the lucrative Europe and Asian markets.
Motorola Mobility came into existence after the spin off from its parent company Motorola Inc. on January 4, 2011. After the separation, the company is primarily targeting the retail customer segment for its future growth. So in order to cash in on the growing popularity of the smartphone market, the company is continuously rolling out its popular android-based smartphone devices.
Recently, Google Inc. (GOOG) entered into an agreement with Motorola Mobility to acquire the company for $12.5 billion, subject to regulatory approvals.
Presently, Motorola Mobility holds rights for approximately 24000 patents, which Google is mainly eyeing. Moreover, the company is one of the leaders in the set-top box category, which makes it another lucrative opportunity for Google to go for the bid as the latter is aggressively rolling out the next generation smart TV option called the GoogleTV.
However, lack of product differentiations coupled with stiff competition from other cheap smartphone makers will act as headwinds for the Motorola Mobility stock going forward.
We, thus, maintain our long-term Neutral recommendation for Motorola Mobility Holdings Inc. Currently, Motorola Mobility Holdings Inc. has a Zacks#3 Rank, implying a short-term Hold rating on the stock.
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