Motorola rises ahead of next Android phone launch

NEW YORK Tue Oct 20, 2009 12:59am IST

The sun shines over the Motorola headquarters in Schaumberg, Illinois in this February 3, 2009 file photo. REUTERS/John Gress

The sun shines over the Motorola headquarters in Schaumberg, Illinois in this February 3, 2009 file photo.

Credit: Reuters/John Gress

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NEW YORK (Reuters) - Shares in Motorola Inc MOT.N rose over 8 percent on Monday on investor anticipation that its second phone powered by Google Inc's (GOOG.O) Android system would be a hit at Verizon Wireless.

Shares in Motorola rose 65 cents to $8.50 on New York Stock Exchange after popular technology blog boygeniusreport.com praised the upcoming device dubbed Droid, describing it as the best phone it had used since Apple Inc's (AAPL.O) iPhone.

A Verizon Wireless ad campaign for Droid also appeared to confirm for the first time that the No. 1 U.S. mobile service would sell an Android device from Motorola. Motorola and Verizon Wireless declined comment.

"You've probably got some investor enthusiasm over a favorable review," said Avian Securities analyst Matthew Thornton, referring to the blog. "That's fairly powerful."

T-Mobile USA, a unit of Deutsche Telekom AG (DTEGn.DE), was due to start taking orders for Motorola's first Android phone on Monday October 19. Motorola had said September 10 that it would have another Android device to announce in coming weeks.

Verizon Wireless, a venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L), has long been seen as the U.S. vendor of Motorola's second Android device although neither company has confirmed an agreement.

The Droid ad -- which ends with the Verizon Wireless logo -- highlights iPhone's weaknesses, saying "iDon't" have a real keyboard, a 5 megapixel camera, the ability to take photographs in the dark or the ability to run more than one application at the same time.

It ends the ad by saying "Droid does."

After losing ground to rivals such as Apple, Nokia (NOK1V.HE) and Samsung Electronics Co Ltd (005930.KS) in the handset market for more than two years, Motorola has reorganized itself to build phones based on Android.

"There's a lot riding on these new products." Thornton said. "It looks like (Motorola's) going to give it a good fight and it will be an exciting fourth quarter and 2010 for them."

(Reporting by Sinead Carew, editing by Gerald E. McCormick)

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