From the Wall Street Journal:
Google Designing 'X Phone' to Rival Apple, Samsung
By AMIR EFRATI
GOOG -0.89% Engineers at Motorola MSI -0.75% are hard at work on a sophisticated handset, to be released next year, that parent Google Inc. GOOG -0.89% hopes will provide more potent competition for devices like Apple Inc.'s AAPL -0.85% iPhone, said people familiar with the matter.
Seven months after being acquired by Google for $12.5 billion, Motorola is designing its marquee handset—known internally as the "X phone"—to stand apart from existing phones, though the company is running into some obstacles, these people said.
The previously undisclosed development effort is a key facet of Google's strategy for bolstering the miniscule 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.
But while Google is known for swift execution on the Web, its new hardware unit has run into obstacles associated with manufacturing and supply-chain management that have caused the company to rethink some initial plans for the X phone, these people added. Meanwhile, Google must manage complex relationships with smartphone makers that use its Android mobile-device software—particularly with Samsung Electronics Co., 005930.SE -4.06% a Motorola rival that has become the No. 1 smartphone maker with Google's help.