Motorola to buy S'pore's Soundbuzz

LAS VEGAS, Jan 6 - Motorola Inc , the world's third biggest mobile phone maker, on Sunday unveiled two new phones and a plan to buy Asian digital music service Soundbuzz as it looks to stem recent market share losses.

Motorola unveiled the Rokr E8 music phone which, when switched on, is controlled by virtual buttons that vibrate when touched. When switched off, it has no visible control keys. The device also highlights and enables different buttons depending on whether the music player, phone or camera is being used.

The company also announced the Moto Z10, a video phone with editing capability and enough storage space for 24 hours of footage in an effort to appeal to young consumers who like to share videos with their friends.

Motorola has been under pressure to come up with new phone designs as it has been losing mobile phone market share to rivals such as Nokia Oyj and Samsung Electronics Co Ltd in the past year. And it has come under criticism for failing to come up with a strong successor to its Razr phone.

It also faces competition from Apple Inc , which entered the cell phone market with its iPhone in June.

Stu Reed, the head of Motorola's cell phone unit, said the latest phones were part of the company's plan to come out with new products frequently to build a broad phone range.

"We want to sell a broad portfolio. We don't want to be dependent on one phone ever again. We're not about one phone," Reed said in an interview at Motorola's product launch event on the sidelines of the Consumer Electronics Show in Las Vegas.

"HUGE HIT?"

Reed took over as mobile phone chief last July as part of a slew of management changes that most recently had Chief Executive Ed Zander stepping down after the company posted losses for two of the first three quarters of 2007.

The latest phones are expected to go on sale and "ramp up production" in the first quarter, Reed said. Motorola plans to use the morphing virtual keypad in future phones, he said.

"We anticipate we'll use that again," he said.

The Rokr E8 phone does not run on high-speed wireless networks but supports a slower technology standard known as EDGE. Motorola did not reveal pricing.

"If this is priced right it could be a huge hit," said Current Analysis analyst Avi Greengart, referring to the Rokr E8. He noted, however, that Nokia already has similar video editing capabilities in some of its advanced phones.

The Z10 video phone supports high-speed wireless Internet services and is expected to appeal to bloggers or young people who like to create, edit and share videos on the go.

"In the past we were just cameramen, now we are producers," said Jeremy Dale, a marketing executive for Motorola. "The Moto Z10 is about filmmaking on the fly."

SOUNDBUZZ

Motorola also said it agreed to buy privately held Soundbuzz Pte Ltd, a digital music provider in South East Asia. It sells full tracks and ringtones directly to consumers and via white label services for wireless service providers.

Soundbuzz sells more than 200,000 online music downloads and 3 million mobile downloads every month, its Web site says.

Ian Chapman-Banks, Motorola's vice president of marketing for Asia Pacific Mobile Devices, said the acquisition would allow Motorola to expand its MOTOMUSIC digital music portal service beyond China, into India, Southeast Asia and Australia.

"We're taking our MOTOMUSIC experience in China, which has proven to be very successful, and marrying it with Soundbuzz, to provide a much better music experience on the mobile platform," Chapman-Banks told reporters in Singapore.

Dale said that the acquisition and the new phones were part of Motorola's plan to compete directly with dedicated portable digital music MP3 players in the next year and a half.

"We'll show you in the next 12 to 18 months that our music player phones are better MP3 players than MP3 players themselves," he said.

(Additional reporting by Jennifer Tan in Singapore; Editing by Rory Channing and Quentin Webb)
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