Analysis: Motorola’s RAZR madness

Motorola is looking to take the enormous popularity of its RAZR phone to U.S. CDMA networks, unveiling on Tuesday the RAZR V3c. While the appeal of the device is likely to be high, its potential audience may be more limited as the high-end handset comes in only a 3G model.

The RAZR is the best-selling handset in the U.S., and one of the key factors in Motorola’s return to dominance in the cellphone market. That success only applied to the GSM market, while in the CDMA market, traditionally one of Motorola’s strong suits, Motorola has given up share to LG Electronics and Samsung. According to the most recent figures from the NPD Group, Motorola dominates the GSM market in the U.S. with a 39% market share, but in CDMA, LG leads the way with a 26% market share, while Motorola and Samsung are tied for the No. 2 slot with 18% each. Samsung launched a CDMA version of the RAZR in Korea in June, but today’s V3c launch marks the first time a RAZR phone is available for the networks of two of this country’s largest carriers, Sprint and Verizon Wireless.

Unlike the GSM RAZRs, which only have GPRS support, Motorola has built full EV-DO capabilities into its CDMA equivalent, likely making the phone more expensive as well as limiting it to markets where CDMA operators have deployed EV-DO upgrades. While EV-DO is entirely backwards compatible with CDMA 1X networks, the newer technology is being reserved for 3G data customers on Verizon’s V Cast and Sprint’s Power Vision services--slim minorities in those carriers’ overall customer bases today. But those carriers may take the opposite outlook--the popularity of the RAZR could drive more customers to 3G services. The phone is also likely to be a popular choice with the new all-3G mobile virtual network providers (MVNOs) Amp’d Mobile and Mobile ESPN, which will only sell EV-DO-equipped handsets.

Motorola is also seeking to capitalize on the RAZR’s popularity to further its partnership with Apple. It is releasing the GSM RAZR V3i, which can come preloaded with Apple’s iTunes software. Motorola, however, is playing down the Apple relationship since the launch of its ROKR music phone, which was routinely panned across the industry. In fact, the phone can be loaded with other media players so carriers can opt to cut Apple out of the mix entirely and launch other music services or allow customers to go get their own entertainment.

Both phones will begin shipping this quarter.