Motorola Aims High-Tech Phone at Developing World

Motorola Inc. (MOT) said on Tuesday it would start selling the Motofone, its thinnest phone yet in high-growth emerging markets in a bid to compete better against bigger rival Nokia (NOK).

As growth slows in long-established wireless markets where most people already own cell phones, suppliers are turning to markets such as India and China as the key to future growth.

Motorola, which has revamped itself with its slim Razr phone line, hopes that it can turn customers heads in high-growth emerging markets with a phone that costs less to make and is even skinner than the Razr.

"What today is about is how we get to 5 billion units in the industry," Ron Garriques, the head of Motorola's handset division, told investors.

About 2 billion people currently have cell phones around the world.

Motorola is particularly keen to make inroads in high-growth markets where Nokia is the No. 1 supplier.

"We must go out there and disrupt the high-growth markets," said Garriques, who added that the company would also improve its distribution channels in these markets.

He said Motorola has already received an order from one carrier for 500,000 Motofones.

The phone is 9 millimeters thick, compared to the 13.9 millimeter Razr, and it is the first of a new slim phone design platform known as the SCPL.

The phone will also include features such as local language voice commands, aimed at helping users that cannot read, and a screen that can be viewed clearly even in the glare of sunlight, Garriques said.

Pricing for the phone was not disclosed.

The first version of the Motofone will work on networks based on GSM, the technology which 80 percent of the world's cell-phone market is based on.

In the first quarter this will be followed by a version based on CDMA, a wireless technology used in the U.S. and some parts of Asia, Garriques said.

He said the Motofone may be shipped first in India, but that this had not been decided yet.

Yankee Group analyst John Jackson said the Motofone would help the company but noted that even though price is a big issue in emerging markets, many users there still want phones with the latest features such as Web-surfing and cameras.

The fact that the latest phone is part of a larger line-up could also help Motorola to curb its expenses, Jackson said.

"It should make Motorola more cost competitive," he said.

Motorola also revealed plans on Tuesday to sell two new CDMA phones aimed at the mass market.

Garriques used the announcement to take a dig at Nokia, which recently said it was pulling back from the CDMA market.

"We will go aggressively after the CDMA handset market and take over ... where others weren't able to compete," he said.

The news came a day after Motorola introduced several new phones inspired by the Razr. Its Krzr flips open like the Razr but has narrower dimensions. The Rizr phone slides open and is also narrower than the Razr.

The company also introduced the Razr Maxx and the Razr XX for services such as music and video downloads over high-speed wireless networks.