GOOGLE DESIGNING ‘X PHONE’ TO RIVAL APPLE, SAMSUNG

Engineers at Motorola Mobility 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.

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. (WSJ.com)