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Motorola Releases Q1 Results. 250,000 Xoom’s Shipped, But Does Shipped Mean Sold?

April 29, 2011 - Written By Randy Arrowood
Motorola Mobility released their Q1 results yesterday, and while less than impressive it shows that improvements have been made. Revenues are up, losses are down, shipments are up and they are beginning to accumulate some cash at the end of their balance sheet. From the Moto Mobility Investor website:

First Quarter Financial Highlights

  • Net revenues of $3.0 billion, up 22 percent from first quarter 2010
  • GAAP net loss of .27 per share compared to .72 loss in first quarter 2010
  • Non-GAAP loss of .08 per share compared to .48 loss in first quarter 2010
  • Mobile Devices revenues of $2.1 billion, up 30 percent from first quarter 2010; GAAP operating loss of $89 million; non-GAAP operating loss of $61 million
  • Shipped 9.3 million mobile devices, including 4.1 million smartphones and more than 250,000 tablets
  • Home revenues of $904 million, up 8 percent from first quarter 2010; GAAP operating earnings of $53 million; non-GAAP operating earnings of $81 million
  • Positive operating cash flow of $107 million
While a bit anemic, the numbers were good enough to give the stock a slight bump in after hours trading, but that’s really as far as we are going to go with the financial aspects of what Motorola Mobility released. The only thing that matters to us is how many Xoom tablets and Atrix phones were sold. Did you see that word? Sold? It matters.
We don’t know how many Xoom tablets were sold because Motorola didn’t report sales, they reported shipped numbers only. Shipments are retailer interest in offering a product to it’s customers, not in the customer’s actual follow through on making the purchase.
 

Words mean things
Some analysts will say that shipped means sold. Other analysts will tell you the opposite, that shipped means shipped and sold means sold. Knowing that every word that is written in these releases or said in the conference calls are tightly scripted by lawyers, I subscribe to the latter idea that shipped does not equal sold.

Steve Jobs made the mistake of using the words app and store together when discussing the plethora of app stores available now or coming soon to Android. Amazon is using that misstatement to try to derail the Apple trademark case against Amazon’s Appstore. Larry Page was ripped from here to there for reading from a script and not hanging around to discuss the negatives in Google’s quarterly report, but trying to dress up a >50% increase in expenses without saying the wrong thing is impossible.

Sold Shipped
Stuffing the sales channel with 250,000 Xoom tablets isn’t the same as 250,000 sold tablets. Moto can’t hide behind semantics forever. The Xoom will have to sell or Moto won’t be shipping any new product to retail. If hundreds of thousands of new Xoom tablets are shipped in the next quarterly report, then and only then will we know that the Xoom is a mover.