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Motorola works on design to lure mkts

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CIOL Bureau
New Update

Ben Klayman



CHICAGO: Motorola Inc., the world's second-largest maker of mobile phones, is counting on its new models introduced on Friday to help it stanch its bleeding market share in Europe.



The Schaumburg, Illinois, company, which unveiled the V80 phone with a rotating cover and two other low-cost phones in Krakow, Poland, is counting on stylish designs and hot features at low prices to help it recapture market share in Europe, where it trails the Finland's Nokia, the industry leader, and others.

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Motorola, which previously had a reputation for technologically superior phones that lacked strong design, has rolled out critically lauded models over the past two years. However, production problems last year hurt the company.



"Motorola has a reputation for the clunky black phone. Even though that reputation is a bit outdated, it still follows them a bit in terms of how Europeans view the company's phones versus Nokia and some of the others," Ovum senior analyst, Michael Doherty said.

"From a purely aesthetic standpoint, what you're seeing in terms of the design at Motorola...is going to help them in terms of the reception they get over there," he added.



Motorola, whose shares rose 2.2 percent on Friday morning, needs all the help it can get in Europe.



While it battles Nokia for U.S. market leadership, Motorola stood fifth in Europe in the third quarter last year at 6.3 percent, less than half its peak share in 2000, according to research firm Strategy Analytics.

Nokia and Germany's Siemens AG led with 42 percent and 17 percent, respectively, followed by Samsung Electronics Co. Ltd. and Sony Ericsson.



"The challenge they have is they have not refreshed their product line in Europe," Strategy Analytics analyst David Kerr said.

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Motorola officials said the new phones will help. The V80, V180 and V220, as well as a limited edition all-black phone that will only be sold in Europe, "fit in wonderfully with the story around driving great design across the portfolio," Motorola vice president Steve Lalla told Reuters.



Ovum's Doherty said Motorola has turned around its reputation in the United States over the past 18 months thanks to well-designed products.

However, whatever positive steps the company takes on design will be ruined if it fails to avoid recent production mistakes. Motorola missed the critical holiday selling season last fall as parts shortages caused delayed deliveries of some hot-selling camera phones.

The V80, which will be available in Europe and Asia early in the second quarter, follows in the footsteps of the stylish but more expensive V70 introduced in early 2002. The earlier model did not include an integrated camera and color screen as the new one does.



The black V80, which will retail for about $300 before operator subsidies, includes a translucent border that allows the display of colored lights that can pulse to sound, as well as integrated



Bluetooth technology, a wireless technology that allows devices to communicate with each other.

The V180 and V220, which includes an integrated camera, will be sold in all markets starting in the second quarter, Motorola said. The clamshell phones, both with color screens, could sell for as little as $50 once operator subsidies are included.



Motorola's shares rose 35 cents to $16.60 in early trading on the New York Stock Exchange.

© Reuters

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