Motorola introduces touchscreen phone

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NEW YORK (Reuters) - Motorola Inc MOT.N, the world's third-biggest phone maker, unveiled a touch-sensitive phone to be sold by Verizon Wireless, as both companies look to compete with Apple Inc's AAPL.O iPhone.

Motorola, which has been losing ground in the cell phone market as it has failed to come up with a hit phone to replace its once-lauded Razr, said the Krave ZN4 would go on sale on Tuesday for $149.99 after rebates to customers who sign a two-year contract with Verizon Wireless.

The Krave has a see-through cover that flips open to uncover a touchscreen virtual keypad, but users can also access popular features such as mobile television and navigation by pressing their fingers on the cover without opening the phone.

For several years Motorola has sold a touchscreen phone called the Ming that has been popular in China, but it has focused on phones with physical keypads in the United States, where it is the market leader.

The popularity of iPhone -- a touchscreen phone sold exclusively through the No. 1 U.S. mobile service AT&T Inc T.N, has led rivals such as Motorola and Verizon Wireless, owned by Verizon Communications Inc VZ.N and Vodafone Group Plc VOD.L, to come up with touchscreen alternatives.

Motorola shares were up 7 cents or 1.3 percent at $5.64 on New York Stock Exchange.

Reporting by Sinead Carew, editing by Gerald E. McCormick