Motorola Mobility Revives Razr to Challenge Apple’s IPhone
October 18, 2011, 4:35 PM EDTBy Scott Moritz and Sarah Frier
(Updates with analyst’s comment in seventh paragraph.)
Oct. 18 (Bloomberg) -- Motorola Mobility Holdings Inc., the mobile-phone maker that’s being bought by Google Inc., is reviving its iconic Razr handset to take on Apple Inc.’s iPhone.
The new version of the Razr has a 4.3-inch touch screen and is 7.1 millimeters (a quarter-inch) thick, Motorola Mobility CEO Sanjay Jha said today at a press conference in New York. Verizon Wireless will sell the device for $299.99 in the U.S. with a two-year agreement, starting next month. It will also be available in Asia, Europe, Latin America and Africa.
Motorola Mobility is bringing back the Razr years after the slim flip phone lost its spot as the top-selling U.S. handset to devices with better Web-browsing, e-mail and video capabilities. The company is now banking on the brand to challenge Apple, which dominates the U.S. smartphone market and this weekend sold more than 4 million iPhone 4S devices in the first three days.
Motorola Mobility “probably thought there was more brand power left in the Razr name,” said Peter Rojas of Gdgt, a product-review and question-and-answer site.
Motorola Mobility, based in Libertyville, Illinois, rose 0.3 percent to $38.92 at the close in New York. Google, based in Mountain View, California, added 1.4 percent to $590.51.
Gingerbread
The Razr runs on Google’s Android Gingerbread operating system and is upgradeable to the next version of the program, called Ice Cream Sandwich. The phone is about half as thick as HTC Corp.’s ThunderBolt, a rival product, said Jennifer Fritzsche, a Chicago-based analyst with Wells Fargo & Co.
“The phone is a typical high-end smartphone with all of the high-end hardware and features except for the form factor,” Fritzsche said in a note to investors.
The phone may lure customers away from Motorola’s Droid Bionic, which Verizon introduced last month and which has almost all the same hardware features, New York-based Rojas said.
“Obviously there are some differences, but I can’t imagine why anyone would buy the Bionic now,” he said.
The original Razr, introduced in 2004, sold more than 100 million units and helped Motorola gain market share from rivals such as Nokia Oyj. Motorola struggled to repeat the success of the device with its later products, resulting in falling sales and an eventual breakup of the company in two.
In August, Google, the biggest maker of smartphone software, agreed to buy Motorola Mobility for $12.5 billion in its largest acquisition, gaining mobile patents and expanding in the hardware business. Google’s Android also runs phones made by companies including HTC and Samsung Electronics Co.
Motorola Mobility also introduced a fitness device that doubles as a music player and takes calls. Motoactv tracks heart rate and calories burned and allows the user to upload workout results and share them with friends, Jha said.
--Editors: Ville Heiskanen, John Lear
To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Sarah Frier in New York at sfrier1@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
