Motorola Poised to Overtake Nokia? Updates RAZR-Thin Lineup

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It's been less than two years since Motorola first introduced the RAZR in Hong Kong, yet the now ubiquitous handset has already reached the milestone of 50-million units sold worldwide. Versions of the RAZR V3 are offered by several carriers in the U.S., including Cingular, Verizon and T-Mobile, and similar mobile phones, like the SLVR, from Motorola that have followed in its wake have done well also.
The RAZR has helped turn Motorola's phone business around. Helping it gain back the hipness quotient long since lost from back in the day when the StarTAC dominated.
Central to the RAZR's appeal is the clamshell's extremely thin 13.9 mm design, which spearheaded a diet trend among manufacturers to see who could create the thinnest phone that would appeal to fickle consumers.
Motorola has also released the RAZR in many different colors to help keep the handset fresh, especially among the younger demographics. There doesn't appear to be an end in sight to what hues the phone vendor will slap on to push more RAZRs, in fact.
The company continues to pump out variations on the hot handset, including several new ones over the last 24 hours.
Due to ship soon (perhaps September) is the follow up to the RAZR, the KRZR (formally known as the Canary). Approved by the FCC a couple of weeks ago, this handset is basically a RAZR that's sat in the sauna a little too long. Meaning, it is a little thicker yet narrower - the KRZR's width is 42-millimeters to the RAZR's 54 millimeters - with some juiced up specs that'll vary slightly between sub-models K1 and K1M. KRZR K1M
Another upcoming phone, the RIZR Z3 (formally Capri), is a 0.6-inch slider phone built in the mold of the RAZR. The company has also just introduced the RAZR MAXX, a multimedia-oriented version (with music controls on the cover) that follows the RAZR V3x ( a more advanced edition of the RAZR V3) with the added bonus of high-speed HSPDA networking, and the Motorola RAZR XX, which deliver HSPDA but not the top-level audio controls. Another HSPDA phone, the RAZR V3xx, was also unveiled.
RIZR Z3
RIZR Z3 Open
The phone-maker also showed off a version of the SLVR music phone, the SLVR L7c, for CDMA/EVDO operators like Verizon. (See Motorola's Web site for detailed specs on all these new phone models.)
RAZR MAXX
SLVR L7c
Can Motorola Overtake Nokia?Not only has the RAZR put Motorola back on the cutting-edge, the ultra-thin phone is a contributor to why the world's number two mobile handset company could, according to market research firm Strategy Analytics, overtake Nokia for the top stop sometime next year; if both companies maintain their current growth rates.
Nokia held a 33.3 percent of the mobile phone market with 78.4 million in sales, while Motorola sold 51.9 million handsets for a 22.1 percent share out of the 235 million cell phones shipped around the world during the second quarter of 2006, according to Strategy Analytics. Nokia's sales grew by 29 percent and Motorola's 53 percent.
"If Motorola can continue this breakneck pace - a stretch but not totally inconceivable given the strength of their core designs - it would overtake Nokia in the first half of 2007, said Neil Mawston, Strategy Analytics associate director of the wireless device strategies service. "The stars would need to align for Motorola on additional new products, 3G, and component supply but this should be a strong warning for Nokia which should feel pressure to more rapidly improve both entry- and mid-tier product offerings in terms of both designs and numbers."
The Smartphone EffectIn the increasingly important smartphone sector, which Nokia dominates on the consumer side worldwide, Research In Motion (RIM) on the business side, and Palm performing strongly in the U.S., Motorola recently made a significant splash with its ultra-thin Q. The 0.45-inch handset is a Windows Mobile device with a QWERTY thumb-keyboard that is clearly targeted at competing with RIM's BlackBerry handhelds and Palm's Treo's.
Motorola would like to ship 5 million Qs this year alone, 3 million in the fourth quarter, after only starting to offer it in June with Verizon. A model for Europe and GSM/UTMS networks in the U.S. is due in the fall as well.
Part of the appeal of the Q, besides its sleekness and capabilities, is its price: $200 with a two-year contract and $349 unsubsidized. In practice the smartphone isn't actually that cheap to own—voice/data plans start at $80 for 450 minutes and got up to $170 for 4,000 anytime minutes per month.
According to market research firm iSuppli, which performs teardowns of electronic equipment to see what makes them tick and if it’s profitable, the Q's components combine to leave plenty of room for Motorola and Verizon to make a profit.
The total cost to build a Q is only $158, much less than the $200 subsided price. Its most expensive component is its $25 LCD display, followed by memory ($22), XScale Intel processor ($19), digital baseband processor for connecting to cellular networks ($14), and camera ($7). The rest of the components add up to $87, and it costs $8 to assemble a Q.
Of course, none of this includes marketing, logistics, shipping, and other costs not related to materials.
Nonetheless, iSuppli believes the Q's inexpensive design and low price will prove assets to Motorola as it vies for market share against established rivals.
“Given the Q’s price point, and Motorola’s overall market leverage, this phone likely will succeed in reducing the pricing for smartphones overall—boosting acceptance among users who might flinch at the higher-than-$200 price point established by previous Personal Digital Assistant (PDA)/smartphone products,” said iSuppli senior analyst Andrew Rassweiler.
RIM's BlackBerry 8700 series devices cost $123 to build and sells for $299 from Cingular. While RIM has touted efforts to add a image capture and improve multimedia in future BlackBerrys, the Q currently leads in these areas. RIM Chairman & co-CEO Jim Balsillie said recently, however, that - so far at least - he's seen no impact from the Q on his company's business.
Balsillie told Reuters, "I know they're aggressively promoting it, aggressively pricing it, and it could be that it's finding traction in other places, but we definitely haven't seen it in our market."
iSupplie hasn't broken down the new Treo 700p or the Treo 700w yet. They both sell for around $400 with service contracts.
Although they dominate worldwide, Nokia's smartphones perform much stronger in international markets like Asian and Europe, where its newer Symbian-based Nseries S60 devices have done particularly well. The company has sold over 5 million Nseries smartphones in less than a year. No numbers accounting for Nokia's new Eseries business smartphones are available yet.
Since we first published this story, Canalys released its findings for the Q2 2006 worldwide smart mobile device market, which accounts for PDAs, smartphones and cellular-wireless handhelds. Canalys found that smartphone shipments continued to explode, growing 73 percent over the same period last year. By comparison, PDA sales continued to sink, dropping 33 percent year over year. So growth for the smart device market as whole averaged out to 55 percent.
Significantly, because of shipping over a million Linux-based smartphones in China, strong initial demand for the Q, and contused sales of its Symbian/UIQ handsets, Motorola leapfrogged over RIM and Palm to land at number two behind Nokia as a smart device and smartphone vendor for the first time.
Still, to put this achievement in perspective, Nokia commanded 47 percent to Motorola's 8.4 percent of the market, followed by RIM with 6.2 percent, Sharp with 6.1 percent, Palm with 6.0 percent and the rest with 25.5 percent.
Nokia, for example, shipped six times as many smartphones as Motorola, its nearest competitor. And, out of the 18.9 million smart devices sold last quarter, Nokia accounted for 9 million of them to Motorola's 1.6 million, which is not much more than its two nearest competitors.
“Motorola set itself some pretty ambitious targets for the Q,” said Canalys analyst Nick Spencer. “And it has done a good job on the supply side in its first quarter, especially when you consider the problems it has had bringing such devices to market in the past. But it now needs the kind of user pull that will sustain high shipment levels over the longer term. With RIM and Palm regularly shipping more than a million devices per quarter each, the stamina of the competition, and user acceptance of their devices, should not be underestimated.”