CES 2008

Motorola Announces Video and Music Phones

| Jan 10, 2008 | Mobile Devices | Show Update

| Analysts: Avi Greengart, Brad Akyuz

Current Perspective: Negative/Neutral Vendor Importance: High Market Impact: Low/Moderate

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Event Summary

January 6, 2008 -- Motorola unveiled the new ROKR E8, Z10, and RAZR2 V8 Luxury Edition at CES 2008 in Las Vegas. The ROKR E8 is a music-oriented phone with a virtual touchpad. The new Z10 has a kick-slider form factor and offers advanced video capturing and editing capabilities. The ROKR E8 and Z10 will be commercially available in unspecified markets in Q1 2008. The unlocked RAZR2 V8 is now exclusively available through Motorola’s online store with a $679 price tag.

Analytical Summary

• Current Perspective: Slightly negative on Motorola’s two new phones, which should be modestly successful if priced right, but do not go nearly far enough to invigorate Motorola’s lackluster lineup and were launched at CES without any pricing information. The Z10 is a European multimedia phone with Motorola’s nice “kick slider” (banana phone) form factor that slots below similar offerings from Sony Ericsson and Nokia; if it is priced below them, it should sell. The ROKR E8 has a “morphing keyboard” that changes based on user activity. It is not nearly as flexible as a touchscreen, but the haptics that let users know a “button” has been “pressed” are implemented extraordinarily well. If priced at $99 or below, it should be a hit. Above that mark, there are equally capable music phones already on the market from Samsung, Nokia, and others. Motorola was not willing to give us even the slightest indication of pricing, but executives insisted that they believe the E8 will compete effectively with any music phone on the market, which did not make us feel better about the likely price range.

• Vendor Importance: High to Motorola, because CES is the first opportunity for Motorola to launch products in the post-Zander era, and the vendor has yet to find a hit device that will bring back the glorious RAZR days. Instead, the company has instead settled on a “drumbeat strategy” (Motorola’s term) of steady product launches. For this to work, each product must be successful, rather than the hit-driven business model that forgives some misses.

• Market Impact: Low to moderate on the consumer handset market, because there are already better devices from competitors catering to the mobile music and imaging crowd, and the new Z10 and ROKR E8 are not revolutionary enough to make another “RAZR effect” for Motorola. However, the E8’s implementation of haptics will be widely imitated regardless of how the music phone fares in the market, as it allows touchscreen-style devices with eerily lifelike tactile feedback.

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