With Moto X, Google Enters a Crowded Smartphone Market

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The time has come for Google, the king of online search, to show whether it has any business selling hardware.

After lackluster results selling devices made by other companies, Google is giving hardware another try -- this time with a smartphone made by a company it owns. On Thursday, Motorola Mobility, the handset maker Google bought last year for $12.5 billion and then retooled, introduced the Moto X, the company's first major device since the deal.

The phone has all the standard features expected of today's top smartphone, with a twist: the ability to control the phone by talking to it, without lifting a finger.

The stakes are big for Google, and not only because of the high price that it paid for Motorola. Google is enormously profitable, but its growth is slowing because of lagging ad sales. Finding success with the new phone could lead to a new source of revenue and a way to get more users to view the company's ads.

The company has been aggressive in absorbing Motorola. It put a former top executive, Dennis Woodside, in charge of Motorola, laid off thousands of Motorola workers and formed a new team with many employees from its fiercest competitors, including Apple, Samsung and Amazon. A major marketing effort is expected for the Moto X.

"I think we've created an awesome company," said Iqbal Arshad, Motorola's senior vice president of global product development. "And Moto X represents who we are."

Still, sales could be an uphill climb. The phone, decked out with multiple processors, sensors and voice controls, is landing squarely in the brutally competitive market for high-end smartphones. And Google has a lot to prove before it is taken seriously as a hardware maker.

Motorola's executives think they have something special with the Moto X, which will be sold by all the major American phone carriers beginning in late August or early September. It has a 4.7-inch touch screen, which puts it right between the smaller iPhone 5 and the larger Galaxy S4 from Samsung. And it has a sophisticated camera and high-speed connections.

But what executives hope makes the Moto X stand out is its voice command capabilities -- like continually listening for a user's voice and quickly reacting to commands. Saying "O.K. Google, now find me my way home" will quickly pull up a Google map with directions to a user's house, for example. The phone learns the voice of its owner and responds only to it. Some people might find this creepy, but it is a feature that a user must turn on voluntarily.

Google executives have long talked about building computers that are so integrated into our space that we can ask them to do things without lifting a finger. The Moto X is a big step in that direction.

Mr. Arshad said the company had to develop a new computing system, X8, to make Moto X work well. One low-powered processor in the phone is devoted to processing natural language. Another low-powered processor is dedicated to detecting movements of sensors -- two twists of the wrist will open the phone's camera, for example. The design of the computing system allows the phone to constantly listen for the user's input and quickly respond without constantly draining the battery, he said. (The phone's battery is supposed to last 24 hours handling various tasks.)

"We want to change the way people call, we want to change the way people search and we want to change the way people navigate," Mr. Arshad said. "That's what touchless control enabled you to do. So we had to design a mobile computing system to do that."

Still, as other device makers have learned, it takes more than snazzy features to gain traction in the handset business. Samsung and Apple dominate the market, and some Asian manufacturers like Huawei and ZTE are selling low-cost smartphones and quickly gaining ground in economically disadvantaged markets.

Tero Kuittinen, a telecom analyst at Alekstra, a mobile diagnostics firm, said it was bad timing for Google to be competing in the high end of the smartphone market. The smartphone business is still expanding -- in the second quarter this year, it grew 52 percent compared with last year, according to the research firm I.D.C. But most of that growth is coming from manufacturers offering cheap smartphones in emerging markets, he said.

And the companies competing with Apple and Samsung for the high-end market just haven't had much luck. HTC's new smartphone, called the One, and BlackBerry's new phone, the Z10, got good reviews but still sold poorly.

Mr. Kuittinen said that after Google bought Motorola, it killed its line of low-cost cellphones and "moved to high end, just when the high-end market ran out of gas." "They've really lost momentum, they've lost distribution, and they've lost shelf space."

Google also has a track record of spotty hardware sales. The Nexus Q, a streaming media player it introduced last year, was killed just over a month after its release, dogged by bad reviews. The Chromebook Pixel, a touch-screen laptop that Google designed and manufactured, is a fancy piece of hardware, but the market for a $1,300 laptop with no ability to run desktop software is unclear.

Another Google device, Glass, is not yet available to the general public, though it has already been the subject of public ridicule. The Chromecast, though, a stick that plugs into a television and enables people to watch online video, is getting positive reviews from technology writers and appears to have strong sales.

Chetan Sharma, an independent telecom analyst who does consulting for carriers, said it was unlikely that customers will flock to the Moto X. Plenty of people are chained to family plans and won't be able to upgrade to a new phone yet.

"That leaves only a sliver of consumers who are up for grabbing a new phone," he said.

But Motorola executives say Moto X is just the beginning. The company plans to offer a broad portfolio of products. Moto X is a high-end phone, but the company will introduce a lower-cost smartphone later this year, said Rick Osterloh, the company's senior vice president of product management.

Motorola may also contribute to Google's efforts in making wearable computers like Google Glass, or eventually a smartwatch. Mr. Arshad said that the company's X8 computing system was part of the company's long-term goal to make mobile devices smarter and fit in the next generation of mobile devices.

"You could easily see the same technology we have here applicable to all sorts of different form factors in addition to wearables," he said.

Claire Cain Miller contributed reporting.

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This article originally appeared in The New York Times.


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