Mot's UIQ buy more an 18 than a 180

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Oct. 29, 2007

Motorola's interest in buying half of Symbian stack-provider UIQ represents a diversion rather than a U-turn away from Linux, writes mobile phone market analyst Andreas Constantinou in an informative blog post. Constantinou figures Motorola may move about 10 percent of its planned Linux-based models to UIQ.

Constantinou figures that with a 2-3 percent stake in the Symbian phone stack market, UIQ Holdings is worth about $30 million. Thus, he estimates that Motorola will pay about $15M for half of the company.

UIQ is not revenue-positive, he notes; thus, the buy must be engineered to save costs, Constantinou reckons.

Assuming that UIQ costs about $3 per phone to license, the estimated $15 million purchase price would have a break-even point of about five million phones. Thus, Constaninou figures that Motorola may have decided to use UIQ rather than Linux in about five million phones.

Two months prior to announcing the UIQ buy, Motorola said it would use Linux in 60 percent of its phones by 2012, Constaninou notes. A linear build-up would see the company shipping about 50 million phones in 2008 and 2009. Thus, five million UIQ phones over the next two years represents only about 10 percent of Motorola's planned Linux portfolio, Constantinou reckons, making the UIQ move a "diversion, not a U-Turn."

Constantinou expects Motorola to use UIQ primarily in "ambitious" phones marketed in Europe and the U.S. This is because these markets have the heaviest regulatory burden, and the most stringent operator testing and customization requirements. He thinks Motorola has had to pay more than expected to get approval for its Linux designs in Western markets.

Constantinou notes that Motorola continues to push Linux onto less and less expensive hardware, such as Freescale's MXC275-30. This single-chip chipset powers Motorola's MotoRokr Z6 (formerly MotoRizr Z6), a music-oriented feature phone with a nifty sliding form-factor. The MotoRokr Z6 appears to be available in about 20 countries.

Freescale MXC275-30 architecture overview
(Click to enlarge; source: Freescale)
Other topics discussed by Constantinou include Trolltech's role in supplying a native Linux SDK (software development kit) to Motorola, Motorola's role in the LiMO Foundation, and lots more. The information-rich post can be found here.

Also, don't miss LinuxDevices.com's earlier analysis of Motorola's UIQ buy, here.

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