SCHAUMBURG, Ill.—Cingular Wireless L.L.C. and T-Mobile USA Inc. halted retail sales of the Razr, Motorola Inc.’s best-selling handset, this week after the vendor informed the carriers that a component glitch was cutting off calls as if the flip phone was closed.
T-Mobile halted sales on Tuesday and Cingular followed suit the next day in order to address the problem.
“At retail, it’s virtually impossible to tell which Razrs have the defective component,” said Peter Dobrow, spokesperson for T-Mobile. “We’re targeting early next week to resume retail sales.”
How does a week of lost sales of the popular handset affect T-Mobile?
Dobrow sighed. “Obviously the Razr is one of our most popular handsets and we are currently not meeting our customers’ expectations. It’s too early to tell what the impact is on T-Mobile in terms of dollar sales.”
“I can already tell you,” Dobrow continued, “it’s not going to go on beyond next week because there’s already shipments of Razrs without the defective component either in our distribution channel right now, or soon to make it to our distribution channel by the end of this week. The defective component was present in a limited number of Razr shipments in the month of February only, as per information from Motorola. So we know that the Razrs shipped in March are without the defect.”
Today, Motorola offered an e-mail statement on the matter, but did not provide a spokesperson to address questions about the situation.
“It appears to be a quality-control problem, not a design problem,” said Roger Entner, analyst at research firm Ovum. “So whoever manufactured this component fell asleep on the job. It’s an expensive hiccup, because Razr is one of the hottest-selling phones in the country. So it’s one week of lost sales. But it’s something that’s easily detected and fixed.”
According to Brad Akyuz at Current Analysis, the fallout is unlikely to dent demand for the Razr. But within the industry, it is an unfortunate reminder of troubles Motorola had experienced in pre-Razr days with handset components.
“It’s ironic that this situation developed only a week after Motorola executives told the industry that it was having trouble meeting demand for their iconic Razr model, which has been one of the greatest success stories in the mobile arena,” Akyuz said. “The phone has been out there for 18 months now and the demand remains unbelievably high. Motorola, at this point, is on a great track, compared to two or three years ago. It really cannot afford to make such mistakes.”
Akyuz concluded: “If the situation is not resolved within a reasonable amount of time—say, a week to ten days—that might hurt Motorola.”
The Razr has captured the market’s imagination with its slim design. Sales of the device have caught fire, with more than 14 million units sold in less than two years on the market. Verizon Wireless sells a CDMA version of the Razr, which was not affected by the glitch.
