Despite the Apple (NASDAQ:AAPL) iPhone’s pervasion into popular culture, oft-forgotten Nokia (NYSE:NOK) still holds the title for best-selling mobile phone of all time. The company sold 250 million of its N1100 phone after it released in 2003. Before the smartphone rush began in 2007 and the mobile business changed entirely, however, only one phone gave Nokia a challenge for the top spot: Motorola‘s (NYSE:MMI) RAZR. Motorola sold 130 million RAZRs in three years, selling faster even than Apple’s iPhone. And now, the RAZR is back.
Motorola announced the Droid RAZR on Tuesday, mixing its two most successful brands into a single new smartphone that is, as of now, exclusive to Verizon (NYSE:VZ). This could be the device that puts Motorola on top of the Android device market, as well as the product that makes Google (NASDAQ:GOOG) a contender in the mobile phone manufacturing business.
It was Apple’s iPhone, released the same summer as the RAZR2, that spurred the line’s downfall. Rather than continue to fight Apple with a brand that at the time was tarnished, Motorola circled its wagons and returned in 2008 with the Droid — one of the first Android smartphones and a new brand that captured the public’s attention (albeit not to the same degree as RAZR.)
The Droid RAZR is, in terms of technical specifications, similar to the new iPhone 4S. It is thinner and more durable thanks to a kevlar casing, has double the memory and is 4G-compatible with Verizon’s LTE network — but its processor, camera and screen are comparable to Apple’s device. Specifications don’t matter, though. With the new phone limited to a single provider — at least in the U.S. — there’s just no way MMI can hope to match Apple’s sales across AT&T (NYSE:T), Sprint (NYSE:S) and Verizon.
What the Razr can do, though, is rebuild MMI’s share of the Android market and pave the way for Google’s place in the smartphone business as a manufacturer. A Nielsen report released in July breaking down the U.S. smartphone market found that HTC had a strong lead over Motorola, with 14% of smartphones purchased over the second quarter compared to 11%.
Motorola has been trailing HTC in the market since 2009; even as the Android market has stolen away market share from former drivers like Research In Motion (NASDAQ:RIMM) and Nokia, Motorola has continued to lag behind its competitors.
In 2011, however, Motorola’s mobile business has been healthy. It sold 4.4 million smartphones during the second quarter, and revenue from its Mobile Devices segment was up 41% year over year, totaling $2.4 billion. The Droid RAZR, as a legacy brand, should help spur those earnings higher in the fourth quarter and give MMI strong holiday sales. It also can cut into HTC’s sales on Verizon’s network — the Thunderbolt has been a best-seller for Verizon this year.
MMI’s soon-to-be-owner Google, of course, says it isn’t concerned with who is on top of the Android market. Speaking with All Things Digital on Wednesday, Google’s mobile chief Andy Rubin said Motorola’s business is going to be kept “at arm’s length” from the Android team and that people “shouldn’t consider Google’s acquisition of Motorola as Google entering the hardware business.”
Rubin’s words ring hollow considering that MMI is fighting for the No. 1 spot among Android phone makers. If the Droid RAZR finds success similar to the original RAZR handheld, and Motorola is able to bring a version of the phone to other providers beyond Verizon, Google might take a more hands-on approach with MMI’s operations. MMI’s quarterly earnings from mobile devices already total one-fourth of Google’s total quarterly earnings. If the RAZR raises MMI’s figures, Google will be a player in the hardware business whether it intended to be or not.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
