Motorola revives brand with slim Droid Razr

NEW YORK Tue Oct 18, 2011 6:01pm EDT

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NEW YORK (Reuters) - Motorola Mobility is reviving its once-popular Razr brand to tout its latest gadget, the Droid Razr, as the world's slimmest smartphone.

The company, which agreed to be bought by Google Inc for $12.5 billion, hopes to compete with arch-rival Apple Inc's iPhone when it kicks off Droid Razr preorders at Verizon Wireless on October 27 and hits store shelves in November.

But the device, which sports a more powerful chip than the iPhone and faster wireless Web speeds, costs $299 compared with the $199 price tag for the latest iPhone 4S.

The Razr brand was hugely popular from 2004 to 2006 but by 2007 it had lost its buzz, forcing the company to back away from the brand and undergo a complete restructuring.

While the Droid Razr could draw some customers from iPhone at Verizon Wireless, NPD analyst Ross Rubin said it would be unlikely to be as big a hit as Motorola's previous Razr, which sold more than 130 million units over several years.

Only about 10 percent of U.S. consumers would buy a $300 phone, Rubin said. "That's a relatively small part of the market. At $199, it would be an explosive seller."

In addition to Apple, Motorola also has to contend with rivals Samsung Electronics Co and HTC Corp, which are expected to come out with new devices for Verizon's fastest network before the end of November.

While Avian Securities analyst Matthew Thornton was impressed with the new phone, he was skeptical that it would put any dent in iPhone sales, particularly as Verizon Wireless is now selling last year's iPhone 4 model for $99.

"Motorola seems to be holding its position at Verizon with that phone," he said but added, "I don't think there's room for any share gain there because iPhone isn't going to give away share. Nor is Samsung or HTC."

Outside of the U.S. market, Motorola's latest device will simply be called Razr. The company hopes to rekindle the allure of its original Razr, which was the thinnest flip phone on the market when it debuted in 2004.

While cutting-edge consumers had moved on from Razr by 2007, Motorola product manager Alain Mutricy said that the brand is still fresh in consumers' minds.

"Still today in the minds of people, Razr stood for the thinnest device of its time," and for elegant design, Mutricy told Reuters at an event where the device was unveiled.

Motorola also introduced MotoActv, a combined music player, performance tracker and GPS device aimed at fitness enthusiasts. This device will start at $249 for an 8-gigabyte version and $299 for a 16 gigabyte version, a range that Rubin described as pricey in comparison with rival devices.

The fitness gadget will go on sale at retailers such as Best Buy as well as Verizon Wireless stores.

Motorola uses Google's Android software to power its smartphones. The Droid Razr, sporting Corning glass, will be able to download movies from Netflix Inc and comes with front-facing and back-facing cameras.

The phone, unveiled days after Apple's iPhone 4S hit markets, is the latest iteration of a line-up that helped stage a recovery for Motorola after years of market share losses.

Around the middle of the last decade, the Razr became the most successful phone brand in Motorola's history. But Motorola's over-dependence on the Razr became a symbol of the company's downfall.

After two years on the market, Razr started to lose its luster amid tough competition and heavy carrier discounts.

That led to years of market-share losses as Motorola failed to come up with another hot device to replace Razr.

Motorola started to turn around in late 2009 with the launch of its first Droid phone sold through Verizon Wireless, a unit of Verizon Communications and Vodafone Group Plc. Motorola Mobility shares closed up 10 cents at $38.92 on the New York Stock Exchange.

(Reporting by Sinead Carew; Editing by Tim Dobbyn, Richard Chang and Matthew Lewis)

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