May 15 (Bloomberg) -- Motorola Inc., the world's second- biggest mobile-phone maker, introduced a successor to its top- selling Razr handset in a bid to reverse market share losses to larger rival Nokia Oyj.

The Razr2 will start selling globally in July, Chief Executive Officer Ed Zander said at a press conference in New York today. The device features an improved camera and more storage for songs. Its design uses more steel and glass than the first Razr to appeal to the higher end of the market.

Zander is under pressure to fend off Nokia and Samsung Electronics Co., which have attracted customers with more advanced video and music features, and offer an alternative to Apple Inc.'s iPhone, going on sale next month. Motorola had its first loss in almost three years last quarter after it cut prices for the original Razr, now more than two years old.

``People went in there thinking that maybe there would be a game-changing new device,'' said Inder Singh, an analyst at Prudential Equity Group in New York, who rates Motorola shares ``neutral weight'' and doesn't own any. ``What we got was a new Razr. Maybe it buys them some time before they really have to come up with something really differentiated.''

The company also unveiled a music agreement with Napster Inc. and showed the new Moto Z8 media phone, two models of the Q e-mail handset and the Rokr Z6 music phone, which begin shipping in Europe and Asia in the next month. The market for phones that offer e-mail, music, video and gaming is growing as much as 35 percent over the next two years, Motorola said in a statement.

Razr Improvements

The new Razr, seeking to capitalize on Motorola's best- selling product ever, is two millimeters thinner than the previous version and has a larger external screen and two- megapixel camera. It has enough memory to store about 1,000 songs and includes a feature that lets users send pre-programmed text messages with the phone closed. It includes e-mail access and full Web browsing, Schaumburg, Illinois-based Motorola said.

``It's not a product, it's a brand,'' Zander said, referring to the Razr, which has sold 98 million units. Motorola will continue selling versions of the phone for years, he said.

Production Costs

Motorola shareholders defeated an attempt by billionaire investor Carl Icahn to gain a board seat last week. He had planned to use the position to pressure management to improve profitability and increase sales. The original Razr and more recent Krzr model are both cheaper and less profitable than the most expensive Nokia phones that deliver video and music.

Price details or carrier agreements for the Razr2 weren't yet available, spokesman Paul Alfieri said. It will probably initially cost about $300 to make, American Technology Research analyst Albert Lin said in a note to clients today.

Shares of Motorola shed 24 cents, or 1.3 percent, to $17.92 at 4 p.m. in New York Stock Exchange composite trading. The stock has lost 13 percent this year, while Espoo, Finland-based Nokia has gained 25 percent, and Suwon, South Korea's Samsung has declined 6.5 percent.

``It's not going to pop out as being something radically different the way the original Razr did,'' said Brad Williams, a technology analyst at MTB Investment Advisors in Baltimore, which manages $11 billion, including Motorola shares.

Media Monster

The Z8, which Motorola describes as its ``media monster,'' comes out across Europe and Asia in June. The handset comes pre- loaded with the Universal Pictures film ``The Bourne Identity'' and can have enough storage for 12 full-length movies or 70 hours of music.

With a new ergonomic slider design that glides open to fit the side of a user's face, the Z8 can access content from broadcasters including CNN and BSkyB and some games from manufacturers including Electronic Arts Inc. Mobile television may become a mainstream service in some markets by 2010, with close to half a billion subscribers, Motorola said, citing Stamford, Connecticut-based researcher Gartner Inc.

Nokia has gained sales in the higher end of the market with devices such as the N95 video phone, which sells for about $990 and has a camera with a 5-megapixel resolution, similar to that in many digital cameras.

The market share gap between Nokia and Motorola widened to its largest in more than three years in the first quarter, Boston-based researcher Strategy Analytics Ltd. said last month. Motorola's market share slid to 18 percent, while Nokia's share widened to 36.2 percent. Nokia forecast yesterday that its market share will increase in the second quarter.

Apple's iPhone, which combines its iPod music and video player with a phone and wireless Internet access for e-mail, will sell for $499 to $599 with a contract from AT&T Inc. Cupertino, California-based Apple wants to capture 1 percent of the mobile- phone market in 2008. That would be about 10 million units.

The new deal with Napster makes it easier for users to load songs onto Rokr phones. Napster and Motorola will develop promotions for North America, the U.K. and Germany and give consumers one month of free access to more than 3 million song tracks through the Napster To Go service.

To contact the reporters on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net.

Last Updated: May 15, 2007 16:29 EDT