[Slammed]

Motorola to take aim at BlackBerry with 'Q' phone


[published on Mon, Aug 1, 2005]
By JASON KELLY

Bloomberg News


Motorola Inc. wants to replace your BlackBerry.

The world's No. 2 cellular telephone maker plans to sell a wireless handset that sends e-mail, creating a competitor to Research In Motion Ltd.'s BlackBerry pager.

The keyboard-equipped handset, dubbed Q, will go on sale in the first quarter of next year, Motorola officials said. The company also plans to ship a music-playing phone made with Cupertino, Calif.-based Apple Computer Inc. in the next two months, Motorola Chief Executive Officer Ed Zander said.

Motorola is stepping up the introduction of high-priced multifeature phones to nab share from market leader Nokia Oyj and meet a goal of widening the company's profit margin.

Motorola's Q phone would add to pressure facing Research In Motion, which is adding fewer subscribers than analysts expected and faces a lawsuit that could throttle U.S. sales.

"They clearly have the most compelling lineup of products out there right now," said Brian Modoff, a San Francisco-based analyst for Germany's Deutsche Bank AG.

"There's not another company that can put together this kind of line-up and these kinds of products," Zander said.

At less than a half-inch thick, Motorola's Q is thinner than the popular Razr, which helped boost second-quarter sales at the fastest pace in three periods.

The Q device features Microsoft Corp.'s Windows Mobile software.

Motorola would use the Q to replicate earlier successes by Canada's Research In Motion, which pioneered the technology that lets customers use handheld devices to send wireless e-mail.

Research In Motion disappointed investors last month by saying it would add fewer customers this quarter than some analysts expected. A patent dispute with NTP Inc. could force Research In Motion to halt sales in the U.S., which makes up about 70 percent of revenue.

While users clamor for e-mail on their phones, they also are interested in listening to music, Zander said. He reiterated the promise to deliver a phone that runs Apple's iTunes software by the end of September.

Apple has shipped 21.8 million iPod music players in four years.

Motorola has faced resistance from some wireless service providers that are still trying to work out how to make money on the product, said analysts including American Technology Research's Albert Lin. Zander declined to comment on how carriers feel about the phone.

Bedminster, N.J.-based Verizon Wireless, the second-largest U.S. wireless carrier, plans to unveil its own music-playing phone, made by South Korea's LG Electronics Inc., by August, Verizon Wireless CEO Dennis Strigl has said.

Other Motorola phones scheduled for release this year include the Slvr, a thinner version of popular so-called candy-bar handsets, and the Pebl, a flip phone with rounded edges that contrast with the Razr's rectangular shape, Motorola officials said.

The company will ship three versions of the Pebl this quarter and three versions of the Slvr will be available in the fourth quarter.

The new handsets are part of an effort to take market share from Finland's Nokia and other competitor while boosting profit and expanding margins, said Ron Garriques, head of Motorola's mobile devices business, the company's largest unit.