One big reason Google may have wanted to dump Motorola? It’s been bleeding cash for years — and it has no signs of stopping soon.
In its fourth quarter earnings report today, Google reported a $384 million operating loss from its Motorola division, significantly more than the $152 million loss Motorola saw a year ago.
That loss ate up 30 percent of Motorola’s $1.24 billion in revenues during the quarter, which was down slightly from last year’s $1.51 billion.
The numbers are the clearest indication yet that the Moto X likely wasn’t much of a success, despite its many innovations. Motorola also had plenty of other devices on the market that could have impacted its bottom line, in particular the latest round of Droids. Ultimately, Motorola’s biggest problem is that it still hasn’t had a hit device since the first Droid in 2010.
Once Lenovo’s Motorola acquisition is finalized, its real test will be to make the division profitable as quickly as possible. And given its hardware expertise, as well as its history integrating large business units from other companies, Lenovo is likely in a much better position to fix Motorola’s underlying financial problems.