Hello, Moto: Q leaps into smart phone fray

Sleek rival to Blackberry enters booming market with $50M campaign

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Motorola, the company that turned cellphone marketing on its head with the Razr, is spending more than $50 million with partner Verizon Wireless to launch its first smart phone smack into the hottest marketing battlefront in technology.

"There's overwhelming [consumer] pressure for these hybrid devices," said Andrei Jezierski, partner at strategy consultant i2 Partners. "The dam is about to burst. It's huge."

Motorola's sleek Q furthers its mandate to market high-design phones aimed at casting a glow around the entire brand. It is named for the fact it contains a full QWERTY keyboard, but Q is also the name of James Bond's gadget man, said Leslie Dance, corporate VP-global marketing and communications.

The Q, like the Motorola iTunes Rokr from Cingular Wireless, will be launched with two campaigns, one from Motorola agency Goodby, Silverstein & Partners, San Francisco, targeting a young, hip audience, and a second from Verizon Wireless from Interpublic Group of Cos.' McCann Erickson, New York. Spending is expected to be about $50 million, though a Motorola spokeswoman declined to comment on the Q or its marketing.

sector up 50%

There was some criticism of the two distinct ad campaign approaches when the iTunes Rokr failed to sizzle at launch last holiday season. Omnicom's BBDO handled the Motorola campaign and a separate team from the agency handled the Cingular effort, a takeoff on the Apple iPod silhouette campaign.

The Q will take on Research In Motion's BlackBerry and Palm's Treo, titans in the category that garner about half of their revenue from smart-phone sales, according to Mr. Jezierski. Last year, 45 million smart phones were sold, up 50% from the previous year. That number is set to explode to 75 million units this year, up more than 70%, he said.

Roger Entner, VP Wireless Telecom for Ovum, said consumers have resisted cellphones costing over $200, but the Razr's success illustrated that "people will pay for design." The question remains whether consumers will pay the price for a computer in the pocket. But business executives will, and that market has hardly been tapped.

"The market is so big, all ships will be rising with the tide," said Mr. Entner. He noted there are 149 million business e-mail accounts and very few mobile business e-mail accounts. Even if Treo loses market share, he said, its shipments could still go up 20- or 30-fold, he said.

Still, this won't be a cake walk for Motorola. Nokia is pushing two lines of smart phones, its E-series targeted to the business consumers, and its N-series for the mass market. David Watkins, director-imaging for North America in the multimedia business unit, said Nokia globally leads in market share for converged devices and intends to continue to do so. And Merrill Lynch, in a research report, said that though RIM has a head start with its 8700 in the enterprise segment, Nokia's E61 "could pose competition in the consumer/[professional] segment where RIM is starting to build some traction."

Hewlett-Packard also has competing products. But one of the most significant potential competitors as smart phones go mass is HTC, a Chinese-manufactured phone sold by Verizon Wireless. Recently, HTC smart phones were used by the Census Bureau for its surveys. Motorola last week purchased an HTC research-and-development unit .

Palm, meanwhile, plans its most significant marketing effort this fall, according to Page Murray, VP-marketing. "It's a hot space and every company is going to see what they can throw out there," he said. Mr. Murray said the Achilles heel of the Q is its lack of a touch screen. "It's not just about a QWERTY keyboard on a slim device," he said.

But while Blackberry has its addicted "Crackberries" and Treo users love its user interface, slim may have its sizzle. "I thought the Treo was cool, but it's a brick I'm carrying around," said Harold Sogard, vice chairman, at Goodby Silverstein, the agency developing the Q campaign. "I can't wait to junk my Treo."
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