Motorola (MOT) to Enter Tablet PC Game in 2011

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Motorola (NYSE: MOT) is having a good year. Their new flagship smartphone, supported by mobile carrier Verizon (NYSE: VZ) and powered by the Google Inc. (NASDAQ: GOOG) Android operating system, is helping fuel a fundamental shift in the mobile market. Next up for Motorola — tablet PC computing.

The Droid X managed to sell around 300,000 units in its first two weeks on the market. It’s obviously not going to overtake the Apple Inc. (NASDAQ: AAPL) iPhone anytime soon — the iPhone 4 sold 3 million units in the same amount of time—but Motorola’s stock is rising. Metaphorically and literally: Android-powered phones now account for 25% of the smartphone market, success spurred by Motorola’s Droid, and MOT shares are up 21% at $8.36 a share, up from a $6.60 low in May. Their gunning for Apple now in the tablet computer market as well.

There have been rumblings that Motorola is prepping an iPad-killer for some time now. Motorola co-CEO Sanjay Jha told investors back in May that the company was already “thinking about the right solution” for their tablet strategy. It was in August though that more details about a Verizon-backed, Android-powered tablet from Motorola started to leak out. A report from The Financial Times claimed that Motorla’s Android tablet would sport a 10-inch screen, mobile hotspot functionality, two cameras, support for Adobe (NASDAQ: ADBE) Flash, and that it may even share some of the technology in Verizon’s Motorola-made FiOS set top boxes. The indication was that this tablet may even hit the market by Holiday 2010, but Google director of mobile products Hugo Barra indicated that this wasn’t the case, as the company wouldn’t get aggressive in the tablet market until Android 3.0, or Gingerbread, was ready. As of now, Gingerbread is still just tentatively set for a Q4 2010 release. Motorola’s Jha confirmed today that Motorola will not have a tablet available this year. Speaking to he Wall Street Journal, the co-CEO said “We want to make sure that any tablet that we deliver is competitive in the marketplace. Hopefully, that’s early next year.”

Jha is smart to hold off until he’s sure that Motorola’s tablet has a real chance to steal the iPad’s thunder. InvestorPlace discussed Motorola’s history of only planning for the short term with their mobile technology, so it’s heartening to see that Jha isn’t interested in rushing out a quickie Droid Tablet. The company’s careful attitude is a promising sign for investors. Given the Droid’s rising success and a promising tablet strategy, the time to buy is now while the shares are still cheap.

As of this writing, Anthony Agnello did not own a position in any of the stocks named here.

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Article printed from InvestorPlace Media, https://investorplace.com/2010/09/motorola-mot-tablet-pc-2011/.

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