Does Atrix 4G Signify Turnaround for Motorola Mobility Fortunes?

At the recently held Consumer Electronic Show in Las Vegas, Motorola Mobility (NYSE:MMI) introduced the Atrix 4G smartphone, which shows some aimpressive features. Motorola traditionally competes with Apple (NASDAQ:AAPL) and Research in Motion (NASDAQ:RIMM) and Nokia (NYSE:NOK). In addition to having Nvidia’s (NASDAQ:NVDA) Tegra 2 dual-core 1Ghz processor and a whopping 1 GB of RAM memory, it has got 16GB of internal storage and runs on Google (NASDAQ:GOOG) Android 2.2 operating system. This smartphone will be sold through AT&T (NYSE:T) and it will be the first smartphone which will start using the AT&T 4G HSPA+ network. The other main attraction of this phone is that it comes with an optional laptop dock, which can be connected to Atrix 4G smartphone to give users laptop like experience and functionality.

We believe that Atrix 4G may not be the answer to Motorola Mobility’s declining fortunes in the mobile phone market, in which it faces tough competition from the likes of Apple, RIM and Nokia. However, it could certainly be the right step in bringing innovation for Motorola Mobility, which is necessary in order to gain market share in this stiff mobile phone market. We have a $19.32 Trefis price estimate for Motorola Mobility stock, which is well below the current market price.

Does Atrix 4G signify turnaround for Motorola Mobility fortunes?

In 2006, Motorola became the mobile phone market leader due to the innovation that it showed with the RAZR handset. However, the rage died as Motorola was unable to innovate further to bring a meaningful replacement for RAZR. Motorola’s mobile phone market share has declined from 22% in 2006 to 2.4% in 2010, and we expect it to continue to decline to around 1.4% by the end of Trefis forecast period.

We estimate that there is 25% to our estimate for Motorola Mobility price estimate if it is able to maintain its market share at 2010 levels of 2.4% throughout the Trefis forecast period.

Although Motorola has tried to turn around its fortunes with the introduction of more than 20 smartphones in 2010, its market share still declined because only a few smartphones like Droid could make a mark. Motorola Mobility needs to innovate further in order to compete with Apple iPhone and RIM. ^[1] Atrix 4G is certainly a step in the right direction. However, the key for Motorola Mobility would be to keep innovating and bring many more smartphones like that. It would be interesting to see if Motorola Mobility is successful in achieving this, and can at least maintain its market share in future.

You can see the complete $19.32 Trefis Price estimate for Motorola Mobility stock here.

1. According to a Gartner report, Apple iPhone and RIM both gained while Motorola lost market share during the period Q3 2009 to Q3 2010 [↩]