Wall Street tepid on Moto's new flip phone
When Motorola Inc. on Tuesday launched its dual touch-screen flip phone, the Krave ZN4, Wall Street analysts felt it wasn't a home run.
But the Schaumburg-based company finally got back into the game, they said.
"When it comes to Motorola and its struggling phone division, we're looking for signs of improvement," said Alex Bannin, analyst with Chicago-based Morningstar Inc. "While this (Krave) isn't a home run, and it's not that Motorola has failed, but the bar has been raised with smartphones, this is still a significant improvement."
The Krave is a flip phone with a touch screen and a clear cover that acts as another touch screen. It provides talk, music, texting, 500 hours of standby time, 250 minutes of talk time, a 2.8 inch screen, video, 2.0 megapixel camera, and up to 8 gigabytes of optional removable memory and 130 megabytes of available memory.
Krave is available from Verizon Wireless for $149.99 with a $50 rebate and a two-year service contract. If you want all the bells and whistles, then it will cost you: V Cast Mobile TV, V Cast Video and V Cast Music with Rhapsody
range from $13 to $15 a month; Visual Voice Mail for $2.99 a month, and VZ Navigator for $9.99 a month.
While Motorola has lagged behind Apple, Nokia and others with its first touch-screen handset, it clearly has built upon a great idea and made it better for the consumer, analysts said.
Ken Hallman, vice president of Motorola Mobile Devices, told reporters during a briefing that the Krave offers access to music, live TV, GPS and incoming text with photos - even with the flip cover closed.
"This is for the consumer who constantly craves multimedia content," Hallman said.
Despite the advantages of the Krave, the new phone won't turn around the Mobile Devices business but will offer consumers a good choice, analysts said.
"It's a 'me-too' product that says 'We got one too,'" said Mark McKechnie, telecom analyst with American Technology Research. "Anything that sees the light of day there has to be a reasonable phone for (co-CEO) Sanjay (Jha) to OK ... What I'd like to see is for Motorola to bring out an android Google-type phone."
The Krave could be popular and its distribution gives Verizon another touch-screen phone to combat the iPhone, which is exclusively available at AT&T. But it will take more than just one phone, said Rick Franklin, telecom analyst with Edward Jones.
"Motorola's lingering problem within its handset business has been a bloated cost structure," said Franklin. "Motorola will need to improve its profitability and cut costs to do so in order to sustain a meaningful turnaround. It will take time to know if they have succeeded in that regard."
Bannin said a better portfolio of good phones is important to help turn around Motorola's phone business before it's expected spin off next year.
"What we'd like to see is not so much another home run, but lots of singles and doubles," said Bannin. "They don't need another iPhone, just a lot of good phones. Everyone likes to see the cool factor, but that's not the only way to play this game."