Google's China exit could stuff up Motorola

EXECUTIVES AT MOTOROLA are apparently watching Google's unfolding China crisis with horror.

According to Reuters, the mobile handset outfit was hoping to make up for lost ground behind the bamboo curtain armed with phones made cheaply, running Google's android operating system.

With Google threatening to pull out of China over spying allegations, the row has placed the future of two Android projects on hold. One handset was to be made by Motorola and another by Samsung.

In fact, in the phone market Google could be cutting off its nose to spite its face. Sales of Android phones were tipped to do well. Several were built by Chinese firms including ZTE and Huawei.

Motorola wanted to turn around its flagging fortunes by concentrating its efforts in China and the US. It placed a big bet on Android and now must be feeling betrayed.

Morgan Stanley analyst Ehud Gelblum wrote in a research note that he was cutting his current quarter estimates for Motorola's Android phone sales by half a million to 1.5 million due to uncertainty around its ability to ship phones in China.

Motorola declined to give details about the product delay except to say it is working closely with China's network operators to bring out a wide range of devices there.

But the news could be good for Microsoft, which needs to make up a lot of lost ground in the mobile market. µ