Motorola has yet to unveil its new lineup of phones based on the Android operating system, but already analysts are placing bets on its likely success. While the new devices are likely to fetch higher prices than Motorola’s current phones — and could give the ailing handset division a much-needed boost — they probably won’t approach the popularity of the Razr, the best-seller that earlier in the decade set handset design standards, say industry analysts.
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Nor are Motorola’s new handsets likely to vie directly with today’s most popular smartphones, including Apple’s iPhone, Palm’s Pre, and Research In Motion’s BlackBerry, these experts say. Most of Motorola’s new models appear to target the mid-to-low end of the market and won’t be competing with today’s best-selling smartphones, says Matt Thornton, an analyst at Avian Securities.
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Motorola Co-CEO Sanjay Jha has a lot riding on the success of the new crop of phones; a failure to release attractive devices has fueled market-share losses to competitors, including Apple. In the first quarter alone, the handset unit’s operating loss widened to $509 million as sales tumbled 45 percent, to $1.8 billion. The worsening financial performance and tightening credit markets last year forced Motorola to scrap plans to spin off the division until at least 2010.
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High hopes for the lineup have begun to fizzle as prototypes surface in the U.S. and Europe and images and first impressions of the devices circulate. Many analysts doubt any of the new models will pack the Razr’s punch. Some features are expected to be similar to those already introduced by rivals like HTC. I don’t expect these phones to be razzle-dazzle, says Michael Mahoney, senior managing director at investment manager Falcon Point Capital. Motorola wouldn’t comment on its Android plans.
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The Smartphone Market’s Lower End
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Motorola’s chief differentiation will lie not so much in distinctive…