Motorola Fixes RAZR Crash Problem

Motorola CEO Ed Zander told reporters at a press briefing Wednesday that it had resolved a technical problem in its popular RAZR phones, which caused the device to drop calls and restart itself automatically. The issue led to a halt in shipments and was quickly picked up by the media.

Zander said the bug resided in a component from a new Motorola supplier and only affected GSM versions of the RAZR in the United States. U.S. wireless carriers T-Mobile and Cingular pulled the phones from shelves last week, leading to a backlog of orders.

"We caught it and fixed it," Zander said. "There were three or four days where we stopped shipments and went in and fixed it." He added that the impact on consumers was small because the affected RAZR handsets were still in the carriers' inventory, not already sold to customers.

Still, the problem had far-reaching consequences for the company. Motorola's stock was downgraded to "average" from "above average" by financial analyst Caris & Co., but began to rebound in price on Tuesday.

Zander added that he was surprised by the amount of coverage the issue got, and characterized it as a minor problem. He also touted Motorola's new supply chain for detecting the flawed component before thousands of RAZR phones had reached customers, preventing a mass recall.

The RAZR has proven a goldmine for Motorola, which posted a surge in fourth quarter earnings, up 86 percent to $1.2 billion.