Intensified competition in the smartphone arena has resulted in Motorola Mobility’s $80 million loss in the fourth quarter, with the disappointing quarterly results further aggravated by merger costs linked to Google’s proposed $12.5 billion takeover of the company.

Motorola Mobility’s Thursday reporting of its 2011 fourth quarter and full-year results revealed that even though the yearly revenue for the company witnessed a marginal rise, the year-on-year earnings during the fourth quarter plunged because of poor device sales as well as high operating costs.

With Motorola Mobility largely struggling to differentiate its devices from other Android handsets and challenge rivals like Apple, the fourth quarter sales of the company stood at 10.5 million mobile devices in all, including 5.3 million Android-based smartphones and approximately 200,000 Zoom tablet computers.

Despite the fact that Motorola Mobility’s core mobile devices business reported a 5 percent increase in net revenue to $2.5 billion, the mobile business reported a $70 million operating loss during the quarter, as compared to a $72 million operating profit that the company witnessed in the same quarter a year back.

With the fourth-quarter losses at Motorola Mobility having increased further due to the lingering regulatory investigations into the company’s proposed acquisition by Google, Sanjay Jha – Motorola Mobility’s chairman and CEO – said: “We remain energised by the proposed merger with Google and continue to focus on creating innovative technologies.”