Why wearable gadgets may be the key to turning Motorola around

Shares of Google dipped after the company posted a disappointing quarter due largely to its flagging Motorola division. The once-dominant manufacturer saw $218 million in non-GAAP operating losses, as Boy Genius Report points out, marking a dramatic downturn from the $49 million the division lost during the same period last year. And Google cut nearly 5,400 Motorola jobs during the quarter, prompting BGR to ask whether it is trying to shrink the manufacturer into success.

Acquiring Motorola has given Google the rare opportunity to build smartphones as it continues to develop Android, which I wrote about nearly two years ago when the $12.5 billion deal was announced. But smartphone sales are slowing as the U.S. and other markets reach the saturation point, and margins are shrinking for even the most profitable manufacturers. The next big growth segment in mobile hardware is likely to be wearable gadgets like Google Glass, and a new job posting indicates Motorola may be shifting its focus in that direction. That would be a wise move while Google continues to empty the pipeline of lackluster smartphones and tablets.

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Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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