Motorola Droid: Off to a Fast Start

Verizon Wireless sold "a lot" of new Motorola Inc. Droid smartphones over its first weekend on store shelves, and the company is "very pleased" with the early returns, according to a spokesman for the device's exclusive carrier.

motorola droid verizon
The Verizon Wireless spokesman didn't disclose sales figures.

Mark McKechnie an analyst at Broadpoint AmTech, put the number of Droids sold between last Friday and Sunday at about 100,000, or roughly half of the 200,000 Droid phones that Motorola had initially supplied to Verizon stores. McKechnie told Bloomberg.com that the early sales figures are "encouraging."

However, some analysts disagreed with McKechnie's conclusion. Roger Entner, an analyst at Nielsen Co., said in a telephone interview that selling only half the initial supply of Droids over the first three days is somewhat troubling for Verizon, and even more so for Motorola, which is staking much of its wireless phone future on Android devices like the Droid.

"Selling 100,000 is a little troubling, since the Droid is supposed to rival the iPhone," Entner said. "The iPhone sold multiples of that amount in its first weekend for the original version."

Entner said that Verizon subscribers are supposed to be "starving for a great device, and the Droid is really a great device. The lack of masses wanting to buy this thing is a little bit troubling, especially after a serious TV ad campaign."

Entner suggested that sales might improve as potential customers learn more about Droid's impressive capabilities. He noted that a Droid TV ad now running features stealth fighter bombers dropping pods that contain Droids, which leaves viewers uncertain about the device's capabilities. One character in the ad, he said, wonders what the device is. "That uncertainty is the same reaction every consumer has," he said. "People still haven't gotten what the Droid is supposed to be."

Entner said there is nothing that seriously speaks against the device, even concerns about Droid's flat keyboard . "It's a very good device and as close as you can get to being the iPhone. And Verizon is the best network, so there's no reason not to buy the device," he added.

Ken Dulaney, an analyst at Gartner Inc., said that time will tell whether Droid sales surpass expectations. He said that Verizon's inability to sell out the first weekend's supply could have been due to consumer worries that the device weighed more than an iPhone and concerns about its flat keyboard.

He added that Verizon's success selling the year-old BlackBerry Storm may have "tapped out the potential buyers" for the Droid. Strong sales of the competing iPhone may also have shrunk Droid's potential market.

Finally, he said, there might be some distrust of the Motorola brand because of the company's recent difficulties in selling mobile devices. " Motorola has not done enough work to rebuild its brand, and that might have scared people," Dulaney said.

On the other hand, Ramon Llamas, an analyst at IDC, was upbeat about the first weekend's sales, noting that selling 100,000 Droids is "nothing to shrug off." "Perhaps the comparison of Droids to iPhones is unfair," he said. About 275,000 iPhones were sold during its first sales weekend, he said.

Llamas added that users aren't reporting problems with the Motorola device, which is a significant mark of success. "In fact, [there hasn't been] a single report," Llamas said. "That's a good indicator."

He acknowledged that the Droid can't be judged a success based on the first weekend's sales figures and urged observers to wait for holiday sales figures. "Anything is possible," Llamas said.

Some analysts have said should Verizon sell 1 million Droids in its first quarter, while others have said it should sell 1 million during the last eight weeks of the year. Llamas said selling a million Droid devices by year's end would be a good result for Verizon. But selling 900,000 Droids during that time is "still not a failure."

He noted by comparison that it took two quarters for T-Mobile USA to sell 1 million G1 devices, and about two quarters for Verizon Wireless to sell a million of the original BlackBerry Storms, Llamas said.

Entner said that selling less than 1 million Droids by year's end "would be disappointing." Some analysts have estimated the Apple will sell 8 million iPhones globally in the current quarter, and Entner noted that Apple in the past has "easily" sold 2 million in a single quarter in the U.S. "Droid should be able to sell like the iPhone," he said. "That's still the benchmark, beat the iPhone."

In a statement, the Verizon spokesman said: "We do not release sales figures but what I can say is: There are a lot of new Droid customers out there showing off their handsets to peers, family and friends. We are very pleased with the strong sales performance out of the gate and believe that 'Droid buzz' will continue to ramp up through the holidays."

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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