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Thursday, April 29, 2010, 06:30 pm PT (09:30 pm ET)

Apple jumps past Motorola to become biggest US phone maker

Motorola announced sales of 8.5 million phones in its spring quarter, dropping it below Apple's record sales of 8.8 million iPhones and vaulting the Mac maker into position as America's top phone manufacturer.

Motorola sold 14.7 million phones in the year ago quarter, but this year its earnings were only down by 9%, due the fact that the company is now successfully working to sell more sophisticated smartphones rather than large numbers of cheap phones, according to a report published by Forbes.

Profits are actually up significantly, with the company reporting a modest $69 million this quarter as opposed to the $231 million it lost in the year ago quarter where it sold 70% more phones.

Four years ago, the company was selling 46.1 million phones per quarter thanks to the popular Razr model. However, with mobile providers pushing the company to deliver increasingly cheap phones, Motorola's profitability has taken a beating.

The company has since worked to focus on higher end smartphones like the Android-based Milestone, sold by Verizon as the Droid. Despite lots of optimism for Android, Motorola only sold 2.3 million smartphones out of the 8.5 million phones it sold in the quarter, compared against Apple's all-smartphone sales of 8.8 million iPhones (and additional millions of iPod touch devices).

Without considering iPod touch sales, Apple sold 3.8 times as many iPhones as the Motorola Droid in the first quarter.

Motorola's Milestone/Droid was the star model of Verizon's Android lineup this quarter, and was heavily promoted as being both exclusive to Verizon in the US and one of the best Android phones available.