Motorola Droid Explodes, and Not In a Good Way

For a smartphone to explode on the scene is good. But when a Motorola (MOT) Droid 2 allegedly explodes in someone's ear, it's bad news. That's especially true from a corporate sense when the company is about to split and the smartphone division will be out on its own, without another group to keep it afloat. And Motorola's phone group is hardly in a financial place to shrug off a perceived safety problem with its products.

Dallas-area resident Aron Embry says that he was talking to his father on his new Droid when he heard a loud pop.

I didn't feel any pain initially. I pulled the phone down. I felt something dripping. I realized that it probably was blood.

Motorola is supposedly looking into the matter. Well, there's a surprise. Of course it is, and I'm sure lawyers and PR minions are all busy running about, trying to contain legal and reputational damage.

It's not as though companies don't run into problems with their products. Google's (GOOG) Nexus One had a rash of them, though none associated with user safety. Various Apple (AAPL) iPhones and iPods have overheated, and there have been various problems with the iPhone 4, though, again, not safety related.

But a Google or Apple has the resources to deal with problems and remain stable. Motorola's phone and set-top box groups spin off as Motorola Mobility on January 4. And that organization's financials show nothing of the strength of a Google or Apple.

In its last reported quarter, Motorola noted that the mobile devices group saw sales of $2 billion -- up 20 percent from the previous year -- but still had a $43 million loss. That's down from the previous year's $216 million, but, golly, sales of $2 billion and a multi-million dollar loss? At what point does the company have enough sales or operational control to make money?

The company's home segment, which, last quarter, made $49 million in operating income, has two parts: consumer set-top boxes and modems, and broadcast and cable network equipment. But only the consumer products will go with Motorola Mobility. That may not be a problem if Motorola can continue to ride the Android wave. And, admittedly, there has only been one Droid 2 injury so far. But it's a competitive market, and if consumers get uncertain about one phone, there are plenty others to choose from.

Related:

• iPhone 4 Snafu Is the Latest Sign That Apple's Dysfunctional Customer Relations Will Be Its Downfall
• Google's Nexus One Phone: A Case Study in Bad Product Management
• Apple Dances Around Overheating Problems, So Who's Surprised?