Motorola Inc unveiled on Thursday a new cellphone that uses Google software and features easier access to social networking sites like Facebook and Twitter, but some analysts said it might not be enough to turn around the company's money-losing handset business.
The phone, the first to emerge from its partnership with Google Inc, is viewed by Wall Street as Motorola's last big hope to regain the market share it has lost to rivals like Apple Inc's iPhone.
Shares of Motorola were up around 1 percent at $7.93, but barely more than the overall market and had fallen off earlier highs of $8.15 that were hit before the phone was unveiled. In contrast, when Palm Inc unveiled the Pre phone t the Consumer Electronics Show in Las Vegas in January, its stock rocketed 35 percent.
Motorola's stock had risen over 10 percent in the past month in anticipation of the new phone.
It's not really a threat to iPhone because it doesn't look distinctive enough, said Macquarie Research analyst Phil Cusick, adding that the shares were likely retreating from earlier highs due to an absence of a surprise. I think it's pulling back here because really what they launched was essentially in line with what we'd been expecting.
The phone, which uses Google's Android software, has a slide-out mini-keyboard and a five megapixel camera.
Some analysts were impressed by Motorola's efforts to simplify managing contacts and messages from online social sites on the phone.
I like it, said Deutsche Bank analyst Brian Modoff. It's really tied in to the social networking element. They did a good job on the social networking element.
The phone will be called Cliq in the United States, where it goes on sale at Deutsche Telekom AG's T-Mobile USA in the fourth quarter, and branded as Dext when it goes on sale in the rest of the world. France Telecom's Orange plans to sell the phone in the United Kingdom and France; Telefonica will launch it in Spain; and America Movil in Latin America, Motorola said.
Motorola has reorganized its handset unit around Google's Android system, hoping the partnership with the giant Internet company can help it win back market cachet.
The centerpiece of Motorola's Android development is its MOTOBLUR software, which integrates contacts, emails and text messages along with postings and photos from social networks by feeding content from these sources into easy to manage streams.
For example, Motorola's live Happenings application automatically delivers updates posted by friends on multiple social sites to one place and gives the user a choice of ways to immediately reply to those updates.
MAKE OR BREAK
Motorola's Android announcement was anticipated by many as a make-or-break event for the company, which has canceled other phones slated for this year in order to pour most of its development resources into the Android devices.
The device could also be a defining moment for Co-Chief Executive Sanjay Jha, who revealed Motorola's Android strategy three months after he took the helm at Motorola's mobile devices unit in August 2008.
Jha said he does not see the phone as a make or break item, but said its introduction is a very important starting point.
Motorola sees the MOTOBLUR software as the key stand-out, compared with Android phones from competitors such as HTC Corp and Samsung Electronics Co Ltd.
Motorola said contacts, messages and log-in information will be backed up on a MOTOBLUR secure server, so that when a user gets a new phone all the information will show up after the entry of a username and password on the phone.
A phone owner could also wipe data from a lost or stolen phone remotely or even find out where the phone is by using the device's Global Positioning System technology and an online portal accessible to the owner.
ABI Research analyst Kevin Burden said that while such features would be important to the success of any smartphone today, he did not see them as a radical improvements to features already found in smartphones such as Pre from Palm Inc and Hero, HTC's Android phone.
Burden was impressed by MOTOBLUR's backup features but said they would not be enough to make Motorola's cellphone a hit.
It's got to do something more, because that alone is not going to make people go out and rush to buy this phone, he said.
(Additional reporting by Alexei Oreskovic and Clare Baldwin; writing by Ritsuko Ando in New York; editing by Tiffany Wu and Gerald E. McCormick)