Motorola has admitted that it's somewhat perturbed by the impending launch of Apple Inc.'s iPhone, but added that there could be "severe limitations" imposed by AT&T's slower 2.5G network.

The world's second-largest mobile handset maker is coming off a $118 million dollar first calendar quarter loss, notes the Financial Times, where its strategy to increase market share resulted in crisis.

Padmasree Warrior, chief technology officer for Motorola, told the financial paper that her firm is basing a comeback on a new generation of handsets, but admits that iPhone is of particular concern.

"I do worry about [the iPhone] because [Apple] is a great competitor; a very respectable, credible, tough competitor to have in the industry," she said.

At the same time, the exec believes the Apple device will appeal only to a "small part of the market" and hold its share of weaknesses. For instance, she said the phone's web browsing capability could have "severe limitations" because it will run on AT&T's slower 2.5G network, rather than the carrier's high-speed 3G network.

Motorola, which saw a resurgence after the launch of its RAZR handset in 2004, plans to unleash the second-generation of the super-slim handset sometime this summer. Like the firm's Q9 smartphone, the RAZR2 will reportedly run on the faster 3G networks.