Moto, dumping some inventory?

Following a rather weak first quarter earnings report and a dismal outlook, some feared that Motorola was going to start dumping excess inventory and into the market, and start aggressive discounting. Apparently that might have started already.

SMS Text News reports that Orange is doing brisk sales on Moto. Why? Free phones with new accounts, and around $60 for upgrades. In the US, with the exception of KRZR most of the Moto phones are being offered at ridiculously low prices for new customers, especially at Cingular.

Will this lead to follow-on discounting from other phone makers, thus creating a whole new mobile handset problem?