While the public mobile battle between Apple and Google continues to look more and more like a 9th grade fist fight in the cafeteria, the once dominant mobile player in the US, Motorola, literally just saved itself from being chopped up into bits and sold to private equity firms.  And all thanks to Google’s Android platform.

Last month, Comscore reported that Motorola was the leading handset maker with just over 22% share of the market. The problem is that the market for these “feature phones” (ie, old-school handsets that the likes of AT&T and Verizon give away for free) is shrinking.  And Motorola hasnt had a hit handset since the RAZR.  Memba that?

But, hold the phone.  Yep, I said it.  Check out the latest market share of the over 40MM smartphones in the U.S.  While Google may not be selling a lot of its NexusOne phones itself, the core part of their strategy is as broad a distribution as possible, to provide an open alternative to Apple’s iPhone.  And it is working.  I wrote about this a few days ago.

Motorola has been selling enough of the Google-powered handsets that, rather than sell the mobile handset divsion, the company is reorganizing itself into two companies, and keeping the mobile business and the Motorola brand name.  As the new CEO of the new company explained:

Now Motorola is betting the future of the handset business on producing smartphones built largely on Google’s Android platform. That effort has already borne fruit, according to Mr. Jha. He said the company became one of the largest shippers of smartphones last quarter, thanks to offerings like the Droid phone for Verizon Wireless. He said the company expected to ship 20 smartphone models this year.

Mr. Jha better send a large gift basket to Eric Schmidt and commit to being Schmidt’s cut man for the foreseeable future in the ongoing battle royale with Apple.



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