Motorola may make cheaper phones

CIOL Bureau
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SEOUL: Motorola Inc., the world's second-largest maker of handsets, may consider rolling out cheaper phones for developing countries in a bid to grab a bigger slice of the fast-growing global phone market, its chief executive said.

"The answer is a qualified yes," Motorola CEO Edward Zander told a news conference in Seoul, when asked if the company was planning to make cheaper phones.

"It depends on the geography, depends on the market," he said. "There are developing countries and opportunities to sell a product."

Zander, however, stressed Motorola would remain focused on technologies it can bring about.

"But I also want to make sure that we don't get focused away from what we do best, which is building the high-quality, innovative tech products," he said.

Top mobile phone maker Nokia reported a drop in third-quarter earnings after cutting handset prices to win back market share.

On the other hand, Swedish-Japanese mobile phone maker Sony Ericsson, the fifth-biggest player, reported a tripling in profits in the quarter as it gained market share with new camera phones, and increased its average selling prices.

Sony-Ericsson expects the market's growth to slow in 2005 but still increase between 10 and 20 percent.

Motorola is gearing up for a difficult holiday season in cellphones. South Korean handset maker Samsung Electronics Co. Ltd. has gained share in North America and threatens to overtake Motorola's No.2 position.

Zander declined a forecast for the upcoming holiday season. "I'll have to see," he said.

When asked about the South Korean market, Zander said Motorola was seeking to reclaim the market share it lost to local manufacturers as a result of divesting during the downturn of the IT industry in 1999-2000.

"This is a place where we can gain back some market share," he said. "We're healthier now."

He declined to comment on rivals such as Samsung and LG Electronics Inc.