In its preliminary Q4 2011 results, Motorola Mobility (NASDAQ:MMI) recognized “increased competitive environment in the Mobile Device business and higher legal costs associated with ongoing Intellectual Property (IP) litigations” as the main reason for lower-than-expected results.  We can gauge the increased competitiveness in the smartphone market as Samsung reported robust results for Q4, while Apple (NASDAQ:AAPL) is on its way to deliver strong Q4 results riding on the success of the iPhone 4S. 
Meanwhile Google’s (NASDAQ:GOOG) plan to acquire Motorola hit a roadblock a few weeks back after EU regulators suspended their antitrust review on the deal until more information is made available (see Google’s Motorola Mobility Acquisition Hit by Temporary Regulatory Delays). Nonetheless, we expect this acquisition to go through without any further issues.
Motorola Mobility Results Reflect Struggles in Smartphone Industry
Samsung continued to surge ahead in the smartphone market with its market share increasing from a meager 9% in Q3 2010 to 24% in Q3 2011.  The strong Q4 results will ensure that Samsung’s lead in the smartphone market is maintained.  Apple’s market share, on the other hand, declined a little from 17% to 15% during the same period. However, with the success of iPhone 4S, Apple may well deliver strong Q4 earnings and push its market share higher.
The success of Samsung and Apple is continuing to impact the market shares of smaller players such as Nokia (NYSE:NOK), Research in Motion (NASDAQ:RIMM) and Motorola Mobility. And that’s why Motorola’s lower-than-expected preliminary results is not very surprising.Notes: