You said no Western manufacturer of mobile phones using Android was making profit and where's your source for stating Motorola's money is coming from legal settlements?
"The cell phone unit posted a profit of $87 million after years of losses, though that was partly due to a legal settlement of $228 million."
Motorola are planning to split their handset business from the rest of their company. It's just too risky a market for Motorola. £1.8m isn't any money at all when you look at their revenues.
Here's a pie chart of the entire market. Despite all of Nokia's failings, they still make more profit than all of the Android manufacturers put together (22% vs. 13%).
I'd love to see Nokia make an Android handset. I'd almost certainly buy it. However I also think that it would ultimately lead to their downfall.
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