Thursday, June 24, 2010

Motorola Responds With DROIDX

The battle for supremacy of the smartphone market has resulted in quick product upgrades and innovative offer plans. Yesterday, Motorola Inc. (MOT: 7.05 -0.25 -3.42%) unveiled its new flagship DROIDX smartphone to take on Apple Inc’s(AAPL: 270.066 -0.904 -0.33%) newly launched iPhone 4. This will spark strong competition in the U.S. wireless market between AT&T (T: 25.17 -0.27 -1.06%), the exclusive carrier for iPhone, and Verizon Wireless (VZ: 29.12 -0.21 -0.72%), the carrier partner of DROIDX.
Powered by Google Inc’s (GOOG: 477.9939 -4.0561 -0.84%) Android operating system, DROIDX will be commercially available on July 15. Verizon subscribers signing up for a two-year contract can purchase DRIODX for $199.99 after a $100 rebate together with a charge of $29.99 per month for unlimited data download. This is in contrast to AT&T, which recently withdrew its unlimited data download offer.
Motorola’s first DROID phone was a success. The company sold over 2 million DROID phones in the previous quarter. Management announced that its current quarter sales will be even better. However, Motorola still lags far behind iPhone and the BlackBerry devices of Research In Motion Ltd. (RIMM: 58.85 -0.79 -1.32%). Recently, Apple declared that it received 600,000 pre-sales orders for iPhone4 within 24 hours of its official launch.
Motorola tried to differentiate DRIODX from iPhone in several ways, particularly multimedia offerings. First, DROIDX will have a 4.3 inch touchscreen display compared to a 3.5 inch display for the iPhone4. The large display will help high-definition video display. Second, DROIDX will have a high-speed 1-Ghz processor of Texas Instruments Inc. (TXN: 24.35 -0.43 -1.74%) pre-loaded with SWYPE software for fast and easy typing on the touchscreen. 
Third, from the latter half of this summer, DRIODX users will be able to upgrade the OS to Android 2.2 version together with Adobe Systems Inc.’s (ADBE: 30.55+0.17 +0.56%) 10.1 Flash Player. Adobe Flash player is not available in iPhones. Fourth, DROIDX can be used as a modem to create WiFi hotspots for five other devices, including a PC. DRIODX users will be able to either buy or rent movies from Blockbuster Inc. (BBI: 0.27 -0.0178 -6.18%).
Supported by encouraging market traction of its Android powered smartphones, Motorola has showed initial signs of a turnaround. Effective cost control measures, massive demand for wireless broadband services and a competitive portfolio of 3G smartphones will support the stock price in the near term. However, a real turnaround will not happen until Motorola makes a smartphone that outperforms the market. 

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