Is the ZN5 start of Motorola's recovery?

UK: On Monday, Motorola announced the results of its long-anticipated collaboration with Kodak: the MOTOZINE ZN5, due in the market in July. It is the first phone from Motorola to use photography as its lead experience. The ZN5 uses a 5 megapixel camera enhanced with Kodak's image optimisation technology and pre-configured to use Kodak's online and PC services, though it also supports other media-sharing methods such as Shozu.

Aside from being an EDGE-enabled phone with a 5 megapixel auto focus camera with Xenon flash, it also includes WiFi, Bluetooth, FM radio, Windows Media Player 11 and a full HTML Web browser. The phone is a traditional candybar design that flips horizontally to be used in camera mode. The camera is initiated by a one-touch slider. The aim has been to set a new benchmark package for a mid-tier device.

This announcement comes at a crucial time for Motorola. As it refreshes its device portfolio, each new product has to punch above its weight and make a big market impact. Is the ZN5 the start of Motorola's recovery?

If this is the shape of Motorola's strategy for a refresh of its entire portfolio, then it could well be the start of its recovery. The concept of targeted propositions optimised for a distinct use case such as photography or music in collaboration with a known brand in that space is definitely a strong approach, as Sony Ericsson has shown. Couple that with an attractive mid-tier price point and it makes for a package that will be quite challenging for competitors.

Motorola acknowledges that top-end phones are now moving to 8 megapixel cameras, but believes the combination of taking 5 megapixel cameras down the range and having excellent image processing will produce a winning device. This is the 'BlackBerry defence', in which you rationally explain to buyers that more megapixels does not necessarily mean a better picture. Motorola (and RIM) are right, of course, and we think that some consumers are starting to switch on to this. But Motorola will need to demonstrate it very clearly at the point of sale.

As with the first iPhone, we think the lack of 3G will need to be fixed quickly on the ZN5. It seems very strange to put out such a high-spec device in 2008 and not put 3G in it. Uploading a 5 megapixel picture over EDGE will not be a great user experience and lack of 3G will seriously limit its sales potential in Europe and several other regions.

The collaboration with Kodak is essential to the success of the ZN5; as well as providing compatibility with Kodak's EASYSHARE (its PC software), Kodak Gallery (its photo-sharing service) and Kodak's proprietary image processing algorithms, it perhaps more importantly provides the ZN5 with some photographic credentials in the eyes of the consumer.

It's hard for us to tell how good the implementation is, having only seen the PowerPoint slides. The ZN5 holds some promise for Motorola but it urgently needs to follow this up with other products following a similar ethos – especially at the high end where the big loser from the ZN5 launch is the Z10, which was uncompetitive anyway but has now had the carpet pulled from underneath it by its younger brother.

The authors are Ovum analysts