Zacks_Analysts' Blog : Motorola to Launch CHARM - Analyst Blog

The struggling mobile phone manufacturer Motorola Inc. (MOT) is all set to launch its latest touchscreen smartphone the ‘Motorola CHARM’ with MOTOBLUR enhancements. This device will likely hit the market by the third quarter of 2010, exclusively with T-Mobile USA, the U.S. division of Deutsche Telekom (DT).

 

Motorola Charm is based on Google Inc.’s (GOOG) Android 2.1 operating system, offering social networking facilities with a compact design. It also provides in-call noise cancellation, a facility found usually in high-end Smartphones such as, Apple Inc.’s (AAPL) iPhone and Google’s Nexus One.  It is compatible with Adobe Flash and has a trackpad just like the one available in AT&T Inc.’s (T) Backflip.

 

Motorola Charm is all geared up to compete with HTC Inc.’s Aria launched in June.

 

During the first quarter of 2010, mobile devices revenues of Motorola summed up to $1,641 million, down 9% year over year. Motorola shipped 8.5 million mobile phones, including 2.3 million of smartphones. This is a considerable improvement over 2 million smartphones shipped in the previous quarter. During the first quarter, the company launched 6 new 3G smartphones, all based on Google’s Android operating system.

 

Motorola’s cellphone unit faces severe competition from smartphone makers Apple Inc. and Research In Motion Ltd. (RIMM) and is continuously trying to introduce innovative products to beat competition.

 

In order to regain its market share, Motorola is practically making every possible attempt to slash expenses. Developing new smartphones such as the Droid, which recently gained huge popularity and drove Motorola’s market share, will probably make the division profitable by the end of the year. Motorola expects to launch its next smartphone Droid X in the near future, which will be available at Verizon Wireless (VZ).   

 

The market for broadband network and enterprise solutions will remain promising in the long run. We believe effective cost control measures, extensive demand for wireless broadband services and the recently introduced high-end 3G smart-phones will support the stock price in the near term. However, we do not foresee any above market gain for the stock in the near future, and thus maintain our Neutral recommendation. The short term Zacks #3 Rank for the stock means Hold.