Motorola phones which once ruled the market and were clamored by AT&T for exclusive rights to sell the best - seller Razr and this has taken only one Motorola phone Z9slider this year.

Motorola’s underscores at AT&T due to it’s persistent failure to release handsets that grab the attention of consumers and the service providers whose marketing is crucial to sales. Motorola’s lack of producing new  phones has lead to a depression in it’s market share, which threatens plans to spin off the handset division.

Once having commanded more than one-fifth of the global handset market, Motorola ended the second quarter with 8.5% share, from 9.3% in the first quarter. In June, analysts surveyed 100 representatives of AT&T, Verizon Wireless, Sprint Nextel, and T-Mobile USA retail locations and found that Motorola phones no longer even make it onto the list of the top 10 best-selling handsets. Motorola’s shelf space at the major carriers declined to 15% in June, from 18% in May, according to the survey.

Motorola’s ability to gain share gets a setback from the smartphone manufacturers like Apple and Research in Motion, who have multifeatured handsets that deliver e-mail, productivity applications, and other advanced services. In contrast to this, Motorola has yet to deliver an updated version of it’s smartphone, the Q.

BlackBerry maker RIM has released two new smartphones with AT&T this year alone. Samsung’s recently released Instinct is another device grabbing buyers’ attention. Some analysts see Motorola losing further share. Motorola may end up with as little as 6% global market share by yearend

Greg Brown, CEO Motorola, has acknowledged that Motorola needs a fresh lineup of phones—and that the company was working diligently on getting new products to market. Motorola’s few releases—such as the Z9 slider—have fallen relatively flat.