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Razr Dulled by Tech Glitch

Without revealing much, Motorola Inc. (NYSE: MOT) has confirmed that "a very limited number" of its popular Razr handset have a technical glitch that causes them to disconnect phone calls inadvertently.

Both Cingular Wireless and T-Mobile US Inc. said last week that they have halted sales of the mobile phone, which has been one of the most popular cellphones on the market since its debut in the fall of 2004. More than 25 million Razrs have been sold worldwide, according to Motorola, helping the company rebound from a multi-year slump.

In an email statement, Motorola spokesperson Jennifer Weyrauch says, "Affected handsets would have shipped in the last four weeks," and the company is "working with our customers to ensure quick and easy resolution for consumers."

New, non-defective phones will be in stores later this week, according to Weyrauch.

Only GSM versions of the Razr have been affected, meaning that the CDMA model from Verizon Wireless is still on sale.

All three companies stipulate that the sales halt is not a recall, and that non-defective Razrs will be available later this week.

Anyone who brings a defective Razr to a retailer will receive a replacement phone, says Cingular spokesperson Mark Siegel.

"When Motorola told us about the problem last week, we made the decision to stop selling new ones," adds Siegel. "They moved very nicely to get the problem corrected."

As for the long-term effects on Razr sales, Siegel says, "I wouldn't want to speculate, but it should be very minimal."

"Motorola does not expect any impact on financial results," Weyrauch adds. Wall Street seems to concur: Motorola's share price dropped almost 2 percent today in early trading, but had rebounded by late afternoon.

— Richard Martin, Senior Editor, Unstrung

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