New Motorola Phones Target Music, 3G Net Users

Motorola, the world’s third-largest handset maker, unveiled two new low-end phones on Wednesday that allow users to listen to songs and surf the Web.

The company, which has failed to come up with a strong follow-up to its once-lauded RAZR phone, has lost out to market leader Nokia (NYSE: NOK) and other rivals since early last year.

Motorola (NYSE: MOT) faces stiff competition from handsets such as Apple’s (NASDAQ: AAPL) popular touch-screen iPhone, and has said it would launch 50 new devices this year, including advanced phones.

One new handset is a music-enabled camera phone — the W388 — that sells for under $100.

The second device is a low-end, third-generation (3G) mobile phone — the VE538 — which goes for less than $250 and offers one-click mobile social networking, photo uploading and blogging at various websites.

The two new products will be shipped to Asia-Pacific markets first — before being rolled out globally — by September.

“People don’t buy products any more, they buy what those products can create for them — solutions, dreams, whatever they are looking for in life,” said Ian Chapman-Banks, the general manager for Motorola’s mobile devices business in Asia.

In July, Motorola posted a small quarterly profit after more than a year of disappointing results, as it sold more mobile phones than expected, thanks to strength in North America.

The firm, which narrowly kept its No. 3 ranking in the global phone market ahead of South Korea’s LG Electronics, also forecast a full-year profit that beat Wall Street estimates as it plans new products and further cost cutting.

It plans to separate its mobile phone unit from the rest of the company in the third quarter of 2009.

Earlier this month, Motorola named Sanjay Jha, former COO of Qualcomm, as both co-CEO of the business and CEO of the company’s struggling mobile devices unit. Jha shares leadership duties with current CEO Greg Brown, who stepped in following the departure of former CEO Ed Zander last year.

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