Motorola updates, launches new Q phone
Wireless giant looks to jump-start sales, rival Apple’s iPhone
Motorola Inc. showed that it has no intention of abandoning its iconic RAZR brand, even though the popular wireless phone has become a weight on the company’s bottom line.
At a gathering in New York, the wireless device maker lifted the wraps on a new, thinner design of the RAZR that will hit the markets this summer — where it may compete against the much anticipated iPhone from Apple Inc.
“The RAZR is not just a product — it’s a brand,” CEO Ed Zander said at the gathering, which was broadcast over the Web. “This is a brand we’ll continue to market for years to come.”
That stance shows the company’s loyalty to a product that has become one of the most popular wireless handsets on the market. By the end of this quarter, more than 100 million units of the device will have shipped to date, Zander said at the meeting.
But the RAZR has also featured prominently in the company’s recent troubles. Motorola slashed prices on the device last year to keep up its market share. As a result, consumers ignored the company’s higher-priced models such as the KRZR, which hurt its bottom line. And as the RAZR has become more ubiquitous, it has lost some of its attraction to more fashion-conscious consumers.
As a result, Motorola lost money in the first quarter, and its stock has slid more than 30% since peaking last fall.
The weakness brought a challenge from billionaire activated Carl Icahn, who waged a high-profile campaign for a board seat but was voted down by shareholders at the company’s annual meeting last week.
The new RAZR — dubbed the RAZR 2 — plays on a similar design to the original, but has numerous improvements. Motorola slimmed the already-thin clamshell design by another 2 millimeters and eliminated the so-called “double chin” that sits near the microphone on the original.
The new phone also features two screens — a 2-inch screen on the outside of the handset and a slightly larger main screen on the inside that offers twice the resolution of the original.
“We wanted to build the world’s most ultimate fashion feature phone,” Zander said. “The new RAZR is super thin, super smart and super strong.”
The new model also comes with 2GB of memory for storing music and pictures, and it sports a new technology called CrystalTalk, which is designed to improve the clarity of calls in a noisy environment.
The device is set for a launch in July. Zander did not disclose a retail price for the product.
Albert Lin of American Technology Research said the RAZR2 could be the successor to the RAZR that Motorola so desperately needs, but the company will not likely see much of an impact this year.
“It does not appear to be reasonable for these new phones to lift the bottom line this year, but the potential for 2008 is much better,” wrote Lin, who has a neutral rating on Motorola, in a note to clients. “We are not sure about RAZR2 pricing, but it would likely be the best contender for a volume and margin impacting model for the whole company.”
Aiming at the iPhone
In another move, Motorola also launched an updated design of its Q smartphone. The Q9 version, which launches first in Italy this week before rolling out to the rest of Europe later this year, features a dual-processor setup that the company says can download a song file from the Internet in about 6 seconds.
In a demo, the company compared the new Q9’s download speed with the anticipated speed of the iPhone. Motorola claims the new Q will be the fastest of any smartphone on the market.
“Speed matters,” Jeremy Dale, Motorola’s vice president for mobile device marketing