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Motorola Plan: Sidestep Verizon iPhone

Motorola prepares to take its Google Android strategy to new devices like cheaper phones and tablets.



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said it expects a big jump in fourth-quarter smartphone sales and outlined a three-pronged strategy to counter the coming impact of


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iPhone at


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in January.

Looking ahead to the strongest phone-selling season of the year, Motorola phone chief Sanjay Jha told analysts on an earnings call that smartphone sales will top 14 million units, which is the high end of the company's prior forecast range.

If the prediction is accurate, it calls for Motorola to sell more than 5 million smartphones in the quarter, a 31% jump from the 3.8 million level in the third quarter.

Fourth-quarter growth will be driven by high-tier products and diversification in midtier in the U.S., China and Latin America," Jha said on the call.

Motorola's strong third-quarter performance

and bold prediction for the fourth quarter run counter to a bearish assessment of Motorola's near-term future.

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Motorola shares have been under pressure in recent weeks as analysts point to the impending arrival of the

Verizon iPhone

and the potential disruption to the marketing magic of


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Android software and Verizon's Droid push.

Asked about the continued commitment of Verizon to the Droid effort given the expected arrival of the iPhone at Verizon, Jha said Verizon and Motorola will "continue to invest in the Droid franchise."

Jha, whose phone unit will split from the government and enterprise networking division of Motorola in the first quarter, says Motorola will face some "competitive pressure in the first quarter." To observers, this is a clear reference to the Verizon iPhone.

But Jha said Motorola would "cope with that in a good way."

How? Analysts asked. Jha said continued success with high-end phones and an expansion of midpriced phones would provide plenty of growth opportunity. Motorola is expecting a handful of midrange Android phones at


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to help round out its high-end offerings.

Jha then said other "converged" mobile devices were in the works. At that point, he handed the discussion over to Motorola's mobility president Dan Moloney, who oversees the company's TV set-top box business.

Moloney said there was a "great opportunity" for sharing content between set-top boxes and mobile devices, like tablets. Motorola, observers will note, is working on an Android-powered tablet called the Stingray but offered no new details on the project Thursday.

Earlier during the call, Jha said he expected sales and the total number of phones to grow sequentially over third-quarter levels. The increase will be driven by a push into so-called midrange devices, says Jha. Earnings in the fourth quarter will be higher but offset to some degree by higher costs of new product launches, Jha says.

Motorola beat third-quarter targets Thursday as the mobility business swung to a profit after three years in the red.

Motorola shares rose 7% to $8.64 in early trading Thursday.

--Written by Scott Moritz in New York.>To contact this writer, click here: Scott Moritz, or email: follow Scott on Twitter, go to>To send a tip, email: