Engineers at
Motorola
are hard at work on a sophisticated handset—known internally as the "X phone"—but the
Google Inc.
unit is running into some obstacles in its effort to provide more potent competition for
Apple Inc.,
said people familiar with the matter.
Seven months after being
acquired by Google for $12.5 billion, Motorola is designing its marquee
handset with cutting-edge features to stand apart from existing phones
when it is released next year, these people said.
A Look Back at Motorola
But while Google is known for swift execution
on the Web, its new hardware unit has run into hurdles associated with
manufacturing and supply-chain management that have caused the company
to rethink some initial plans for the X phone, such as using a bendable
screen, these people added.
The previously undisclosed development effort is a key facet of
Google's strategy for boosting the minuscule market position of the
cellphone pioneer, based partly on bolstering quality while reducing the
quantity of Motorola products.
Motorola is primarily working on two fronts: devices that will be
sold by carrier partner Verizon Wireless, such as the "Droid" line of
smartphones, and the X phone, these people said. Motorola is also
expected to work on an "X" tablet after the phone, the people added.
Meanwhile, Google must manage complex relationships with smartphone
makers that use its Android mobile-device software—particularly with
Samsung Electronics Co.,
a Motorola rival that has become the No. 1 smartphone maker with Google's help.
Dennis Woodside, a former Google top sales executive who
is now Motorola's chief executive, declined to discuss products under
development. But he said in an interview that the company is "investing
in a team and a technology that will do something quite different than
the current approaches."
He said while Motorola has "fallen under hard times," it "now has the
support of a shareholder in Google that has resources to do big
things." He added that only one billion of the world's seven billion
people use smartphones, calling that "an incredible opportunity."
For the X phone, an initiative being led by former Google product
manager Lior Ron who worked on the Google Maps team, Motorola wanted
top-notch features for the phone's camera and photo software, such as
better color saturation and the ability to take panoramic shots, two
people familiar with the situation said.
But some of the features were found to drain battery life or already
have been incorporated into popular new devices, such as the iPhone 5
that launched earlier this year, they added.
Motorola also ran into difficulties when it looked into using a
bendable screen and materials such as ceramics that would allow the
company to make the X Phone more stress resistant, use more colors and
mold into different shapes, these people said.
One person familiar with the plans said
Motorola plans to enhance the X Phone with its recent acquisition of
Viewdle, an imaging and gesture-recognition software developer. This
person said obstacles are a "normal" part of the
research-and-development process. Despite the challenges, the new
handset is due out sometime next year.
Motorola, which accounted for less than 3% of Android phone shipments
in the third quarter, according to market research firm IDC, has moved
to improve its deteriorating financial position.
Google has cut 4,000 Motorola workers, or 20% of its staff. This
week, Motorola agreed to sell its TV set-top box division to cable
equipment maker
Arris Group Inc.
in a deal valued at about $2.35 billion.
Google's purchase of
Motorola was a controversial move, partly aimed at acquiring patents to
use against rivals that might sue the Internet company. The company has
since talked up the benefits of making its own devices, even though
Motorola's market share had dwindled.
The deal complicates Google's mission to advance Android. Hardware
makers typically install a version of the operating system that comes
attached with Google's revenue-generating services such as Google
Search, Google Maps and Chrome browser.
Samsung, with its popular "Galaxy" devices, is the biggest such
partner and is quickly gaining market share. The South Korean company
shipped 40.3% of all Android-based phones in the third quarter,
according to IDC. Google has co-developed devices with Samsung and
provided it early access to new versions of Android software.
Some Google executives have expressed fears the relationship could go
sour if Samsung decided to use a "forked" version of Android, according
to four people familiar with the matter. That means Samsung would
create devices based on a version of Android that doesn't come with
Google apps preinstalled.
Motorola is seen as a kind of insurance policy if Samsung shifts
strategy, these people said, even though there is little evidence so far
of such a move. Google could begin adopting an integrated approach of
having its Motorola and Android units work more closely together, like
Apple does with its hardware and software teams, they said.
A Samsung spokesman declined to comment.
Motorola's Mr. Woodside said "I don't necessarily agree" that his
unit is a hedge in case Google-Samsung relations go south. He added that
Motorola is "operating independently" from Google because it wants to
"preserve the success of Android."
Google Chief Executive
Larry Page
has told the Motorola team to "think big" and aspire to reach the scale
of Samsung's mobile business, and promised a significant marketing
budget for the unit, said people familiar with the matter.
But Mr. Page so far hasn't pushed Google's Android unit to aid
Motorola by giving it early access to the most updated versions of
Android software, as it has with Samsung, in order to avoid the
appearance that Motorola is receiving preferential treatment, these
people said.
Google has filled Motorola's top ranks with several dozen Google
executives and product managers, many of whom didn't have previous
experience with hardware, said people familiar with the matter. Google
sees that relative inexperience as an advantage if it wants to
revolutionize smartphone design, these people said.
The company says it will stop making devices for dozens of countries
in order to focus on the biggest markets. Mobile-industry experts said
that will have the effect of reducing Motorola's scale—and thus its
leverage when negotiating over price with suppliers.
Motorola's Mr. Woodside said "scale is important but building great products is even more important."
Pieter Knook, a former executive at wireless carrier
Vodafone Group
PLC, said, "If you look at the handset makers other than Apple, it's a
pretty grim story for anybody who's not Samsung" or Chinese companies
building lower-priced smartphones.
ROME—Italian Prime Minister Mario Monti resigned Friday, ending an
emergency administration that helped loosen Italy from the grips of
Europe's debt crisis through deft international moves, but leaves the
euro-zone's third-largest economy still struggling.
`Dabangg 2`, the sequel to 2010 Bollywood blockbuster
`Dabangg` has managed to surpass the opening day collections of the
original movie. It amassed Rs.21.10 crore in India on the day of its
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Off to a good start in Twenty20s after the "shattering" Test debacle,
India batsman Yuvraj Sigh said he was confident that the team would
carry the momentum not only into the second and final tie against
England here on Saturday but also into the upcoming series against
arch-foes Pakistan.
Mumbai:
After rebounding superbly from the Test loss to England with a
convincing victory in the Twenty20 series opener, India would be keen to
complete a clean sweep of the shortest format by winning the second and
final game here on Saturday.