Razr availability through Cingular Wireless L.L.C. and T-Mobile USA Inc. may be unpredictable until the end of March, according to equity research firm Bear Stearns. That’s when the firm expects Motorola Inc. to fix and return Razr batches that were shipped in February, but pulled from shelves recently due to a component glitch that mistakenly cut off users’ connections.
Cingular and T-Mobile USA last week listed the handset as “temporarily out of stock” on their Web sites, but by Thursday, those notices were gone. According to a Cingular spokesman, online sales had not stopped, but shipping those orders had temporarily halted. It remained unclear at RCR Wireless News’ press time whether online orders at Cingular’s or T-Mobile’s sites would be shipped immediately. Cingular could not provide an exact date when the handset would be reliably available in retail stores, though it reported some stores were stocked. T-Mobile said “virtually all” its retail stores have an inventory of Razrs, though not optimal quantities. Razrs running on CDMA networks were not affected by the component glitch, sparing Verizon Wireless and Alltel Corp. of the troubles.
Industry observers are watching how well Motorola can overcome the hiccup in its delivery of the Razr, which has brought a renewed sheen to Motorola’s reputation and sold more than 14 million units since its debut 18 months ago.
Brad Akyuz, an analyst for Current Analysis, discounted any impacts on Motorola if it could resolve the issue within a week or 10 days of the news of the glitch, which broke March 9. The end of March would mark three weeks since the handset vendor informed Cingular and T-Mobile USA of the problem.
An analysis of the impact on the two domestic carriers filed last week by Phil Cusick of Bear Stearns, which trades in Motorola stock for its clients, suggested that Cingular would be more affected by the unpredictable stream of handsets reaching its retail outlets because the glitch had affected customers using the 850 MHz band rather than 1900 MHz band used by T-Mobile USA customers.
According to spot checks of New York-area Cingular retail stores by CIBC World Markets’ wireless analyst Ittai Kidron, stores were being resupplied slowly. Customers seeking a Razr after stock was depleted were issued Motorola’s V557 as a temporary replacement. Kidron predicted, in contrast to Bear Stearns’ Cusick, that shortages would be alleviated by this past weekend. He also believes the financial impact on Motorola is minimal, if any.
