http://online.wsj.com/article/SB10001424127887324425204578598070710908536.html
As Motorola MSI +1.06% Mobility prepares to unveil its first flagship smartphone since being acquired by Google Inc. GOOG +1.57% last year, new details are emerging about the device's design and Google's substantial support for it.
The moves could have broad implications across the mobile industry.
Google is expected to allow its Motorola hardware unit to spend several hundred million dollarsand possibly upward of $500 millionto market the highly-anticipated device in the U.S. and some overseas markets, including in Europe, said people familiar with the matter.
All four major U.S. wireless carriersAT&T Inc., T +1.36% Verizon Wireless, Sprint Nextel Corp., S +7.35% and T-Mobileare expected to make the device available to their customers this fall, in part because of Motorola's marketing plans, said people familiar with the matter.
Motorola also succeeded in minimizing the amount of software and apps that wireless carriers will preinstall on the Moto X, these people said. Such software, also called "bloatware," has long drawn the ire of wireless customers.
Another selling point will be customization. Google is letting buyers of the Moto X to choose colors on the phone's front and back and engravings, these people said.
The price of the Moto X is expected to be comparable to its competitors, which include Apple Inc.'s AAPL +1.56% iPhone 5, Samsung Electronics Co.'s 005930.SE -0.30% Galaxy S4, and HTC Corp.'s 2498.TW -1.81% One, these people said.
Such devices cost $199 with a wireless contract and $599 or more without a contract.
A Motorola spokesman declined to comment, as did representatives of the four wireless carriers.
Motorola Chief Executive Dennis Woodside implied in recent public statements that prices for its devices would go down substantially over time, as the company won't be as concerned about inflating profit margins as its competitors. He also said the device would be "broadly distributed" but didn't elaborate.
In its first ad for the Moto X that ran earlier this month, Motorola played up the fact that it will largely be assembled in the U.S., a slap at Apple, whose devices are built in China.
Motorola's moves, including the expected unveiling of the Moto X later this summer, are being watched closely by the mobile industry. Mobile executives say privately that component suppliers such as microchip and sensor makers as well as wireless carriers hope Motorola or other hardware manufacturers can break the dominance of Samsung and Apple, which over the past four quarters accounted for half of the 770 million smartphones shipped world-wide, according to research firm IDC, and an even greater percentage of tablet shipments. Nearly a billion smartphones are expected to be shipped in total this year, the firm said.
Motorola sold about 2.3 million smartphones in the first quarter of this year, or 1% of the global market, IDC said.
"The industry is certainly rooting for Motorola as well as the other [manufacturers] to be successful" and break up the "duopoly" of Samsung and Apple, said Rajeev Chand, a managing director at boutique investment bank Rutberg & Co.
He added, however, that there is "skepticism" about whether Motorola can differentiate its products enough to take significant market share. "No one has a formula for success to rival Samsung at this point," he said.
Apple and Samsung have the benefit of sizable marketing budgets. The two companies spent $333 million and $401 million, respectively, to advertise mobile devices in the U.S. last year, according to Kantar Media, a unit of WPP PLC. WPPGY +1.90% Google may end up spending more money than that on the Moto X phone alone, people familiar with the matter said.
Motorola's Mr. Woodside, speaking at The Wall Street Journal's D technology conference earlier this year, discussed some features of the Moto X, including its long battery life and ability to be "contextually aware," meaning it will adjust to its surroundings.
For instance, the device's sensors will know when a person is driving and automatically offer them the ability to give voice commands to get information from the device, including making calls or getting directions, said a person familiar with the matter. Mr. Woodside also said the device will be able to sense when a person is trying to take photograph and help them bring up the camera app more quickly.
Motorola also is hoping to appeal to consumers by letting them customize the device. In addition to being sold in wireless carrier stores, the device will be sold online, where people can choose from different colors for its back panel and front-panel trim. Customers also will be able to have a written engraving on the back of the device, similar to what Apple offers to customers of iPod music devices and iPad tabletsbut not the iPhone.
ABC News previously reported the customization elements.
Mr. Woodside said at the D conference that having the Moto X assembled at a Texas facility would bring its software and hardware engineers closer to the manufacturing process, which could help speed the product development phase. Another Motorola executive has said publicly that the proximity would make it easier for customers to receive the device faster.
People who have seen the Moto X, or were briefed about it, say that Motorola has high hopes the device can gain share in the crowded market. But they cautioned that flagship devices don't always catch fire right away and expectations for future generations of the device would be much higher. For instance, it was Samsung's Galaxy S3 smartphonethe third generation of its hero devicethat propelled the brand to a point where it outsold the iPhone for a time, according to some analysts.
Less-rosy projections for the sales of the Galaxy S4, released earlier this year, have hurt Samsung's share price of late.
