Will Social-Network Smartphones Boost Motorola?

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And it took Jha, who left San Diego chipmaker Qualcomm (QCOM) for Motorola last year, to make smartphones the company's top priority.

PRIORITY E-MAIL

The commitment to an Android phone was clinched in a late October 2008 meeting in Motorola's Silicon Valley office, a short jaunt from Google's Mountain View (Calif.) headquarters. On a cool Thursday evening, Jha sat with Osterloh's team amid circuit boards, chipsets, and software schematics from 6 p.m. to 10 p.m. Over Diet Coke and pizza, they reviewed in detail what would become the Blur-equipped phone. After the meeting, Jha knew "this was a team that could take us places," he recalls. The Motorola co-CEO later killed off virtually all phones being developed for other operating systems, including Microsoft's Windows.

Jha pushed the software developers hard. He had Osterloh and his team redesign the phone's e-mail program several times because he told them it wasn't good enough. Jha had them tweak and retweak the keypad and find a way to increase the lines of visible text on the screen from 4 to 10, minimizing the need for scrolling. As people increasingly juggle work tasks during personal time, Jha wants to make e-mail as much a priority as social networking. "I wanted to be able to have broad appeal in the marketplace," he says.

After most of the software development was done, Osterloh and his team went to work lining up a wireless operator to carry the phone. In late January they pitched to T-Mobile at its Bellevue (Wash.) headquarters. The company's brass quickly agreed with Osterloh's vision that mobile messaging had to be simple and unified across online services. T-Mobile signed on to be the first carrier to offer the Cliq. "It sets a new benchmark for how people can stay connected to online communities," says Cole Brodman, T-Mobile's chief technology officer.

Motorola is betting the combination of Blur and Android will make social networking so much better for mobile users that its phones will stand out. Executives at MySpace have been impressed. Virtually every application on the phone links to MySpace features, such as Friend Status, where users update friends on their whereabouts. "Motorola was not confined to the existing rules on a platform," says John Faith, head of MySpace Mobile.

Blur may be a breakthrough for Motorola, given the company's historic lack of success in software. But it will still be a challenge to stand out against rivals such as Apple and RIM that have much more expertise in software. Jha says he recognizes the difficulty of the task. "We have to ask ourselves what problem do consumers want to be solved," he says. "We have to have a Neanderthal's focus on that."

Crockett is deputy manager of BusinessWeek's Chicago bureau.

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