Moto inks Android deal with Canadian wireless carrier
Rogers Communications Inc., Canada's biggest wireless carrier, will add at least one Motorola Inc. Android device in 2010 to diversify its range of advanced Web and e-mail handsets led by Apple Inc.'s iPhone.
"It's going to be pervasive and it's going to create a lot more smart phones," said Rob Bruce, president of Rogers Wireless, referring to the Android operating system. "There will be a Motorola Android device in our portfolio in 2010."
Rogers added more subscribers last quarter than analysts projected partly because of the iPhone. It's now taking a chance on Motorola, which is rebuilding its wireless business around Google Inc.'s Android system. Motorola hasn't had a bestseller since its Razr handset five years ago. It plans to unveil new phones on Sept. 10 and expects to have two ready for the holiday season. Bruce spoke in an interview in Toronto last week.
Sales of smart phones climbed 27 percent worldwide in the second quarter as mobile-handset sales overall dropped 6.1 percent, according to Stamford, Connecticut-based Gartner Inc.
"Right now, what's not clear is which segment will win out and why," said Neeraj Monga, an analyst at Veritas Investment Research Co. in Toronto. "You have to hedge your bets, you have to have every platform on your network and you have to have every device on your network."
Monga recommends investors buy Rogers shares and doesn't own any himself.
Rogers fell 33 cents to C$30.47 at 10:48 a.m. in Toronto Stock Exchange trading. It had fallen 16 percent this year before today. Motorola, up 74 percent this year, rose 21 cents to $7.94 on the New York Stock Exchange.
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Jennifer Erickson, a spokeswoman for Motorola, didn't respond to an e-mail seeking comment.
While Rogers' current lineup includes Research In Motion Ltd.'s BlackBerry handsets and HTC Corp.'s Android-based phones, the iPhone is the device Canadian consumers associate Rogers with, Bruce said.
The iPhone "tends to get people's attention and tends to overwhelm the rest," he said.
The popularity of the iPhone has led to shortages in Canada. Rogers is getting "good slugs" of inventory but so far hasn't been able to satisfy all those looking to buy, Bruce said.
"We can't keep up with the demand," he said, adding that the company is working to fill back orders.
BCE Inc., Canada's largest phone company, and Rogers are adding more smart phones because they sell better than ordinary handsets and customers spend more each month on downloads and data charges. BCE, based in Montreal, began selling Palm Inc.'s touch-screen Pre last month.
Boosting consumer spending has become critical for carriers during the recession. The average monthly bill for Rogers's customers dropped C$1.47 ($1.36) to C$63.09 last quarter as people spent less on out-of-town calls, ring-tones and other downloads. BCE's fell by more.