Can Motorola’s Motoblur Turn the Tide?

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Motorola (NYSE:MOT) recently announced its third quarter earnings in which it discussed the importance of Motoblur, which is a modified version of Google’s Android mobile phone operating system (OS) that Motorola uses in many of its smartphones.

We believe that by controlling its own operating system and improving its software, Motorola can better compete with competitors such as Apple (NASDAQ:AAPL) and Research in Motion (NASDAQ:RIMM) which are taking market share from Motorola currently.

Motorola’s share of the global mobile phone market is currently around 2.8% by our estimates. If Motorola can maintain its current market share of 2.8% over the Trefis forecast period, this represents a potential upside of 15% to the $9.08 Trefis price estimate for Motorola’s stock. Our current estimate is 13% ahead of the market price.

Differentiated Offering and Better Service to Retain Customers

Motoblur enables Motorola to simply add features on top of Android system and customize its smartphones to the market requirements. By doing this, Motorola can release new smartphones more quickly and doesn’t depend on the future releases of Android to deliver rich features or content.  We feel this enables Motorola to differentiate its products from other smartphone providers.

In addition, Motoblur helps Motorola provide better diagnostic service and an end-to-end solution from a user’s hardware to software needs. As software for mobile phones grow in complexity, users will inevitably encounter issues and Motoblur includes diagnostics support which we feel will help keep users happy and improve customer retention.

Motorola’s market share has steadily declined from a peak of 22% in 2006 to 4.5% in 2009, and we currently expect it to reach 1.6% by the end of Trefis forecast period.  However, if Motorola were able to maintain its current share, there could be an upside of 15% to the Trefis price estimate for Motorola’s stock.

You can see the complete $9.08 Trefis Price estimate for Motorola stock here.

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