Five Reasons The Droid Is A Game Changer For Motorola

Motorola and Verizon's intensely hyped Droid is the first smartphone to hit the market sporting Android 2.0, the latest of Google's mobile OS upgrades. The Droid was officially announced earlier this week and will be available starting next Friday, but it has already returned a measure of spotlight to a company that really hasn't had a handheld hit since the 2004 Razr phone. And Jha and Motorola have made no bones about expectations for a bright future building devices around Android.

"With these products [Cliq and Droid] we've taken the first step in positioning ourselves for the mobile Internet and smartphone market," said Jha, Motorola's co-CEO and CEO of Motorola Mobile Devices, during Motorola's third-quarter earnings conference call Thursday. "In 2010, there will be a variety of new devices as we expand the portfolio across various tiers. We will continue to shift the mix of products to respond to the growing smartphone opportunity."

Here are five reasons why the Droid is a game changer for Motorola.

1. Droid Has Stolen Some of Apple's iPhone Spotlight

Thanks to a not-exactly-subtle ad campaign, the Droid phone has stolen not only some of Apple's smartphone spotlight -- something the much-discussed Palm Pre wasn't able to do -- and has successfully transitioned any discussion of a Verizon-carried iPhone to one that wonders whether Verizon even needs the iPhone. That's no small feat. Questions of Verizon iPhones and AT&T's iPhone exclusivity aren't exactly off the table, but name another smartphone launch in the past year that's managed to marginalize that discussion for even a minute.

2. The Buzz On Android Is Peaking Now.

Back in May, when Motorola first said it would throw its lot in with Google Android whole-hog, we here at ChannelWeb argued that Motorola was already too late to the Android party. After all, by then, Android was a well-known mobile OS quantity, a solid phone, the T-Mobile G1, was already available, and other smartphone makers like HTC have since been churning out new Android phones at a rate far more swiftly than Motorola.

But enter Android 2.0 -- by all accounts, especially developers, the version that will be Android's big leap forward -- and Motorola's Droid, the first Android 2.0-based phone, is hitting the market at just the right time. It's also going to have a key feature in Google's new Maps Navigation service, a free mobile device product that could itself prove disruptive.

3. Motorola's Mobile Strategy Is Paying Off

Those waiting for proof that Jha and his team's strategy was starting to pay off need look no further than Motorola's third quarter results, which despite continue plunges in quarterly revenue also saw Motorola post a modest profit -- $12 million -- that was enough to get Wall Street buzzing. It won't be enough to make anyone forget that Motorola has taken a machete to its balance sheet and eliminated about 9,700 jobs this year, but the profit sent its shares up 9.8 percent Thursday and more than one Street observer, such as RBC Capital Markets, saw fit to upgrade Motorola's stock rating.

4. Droid Isn't Motorola's Only Horse In The Race

Droid may be capturing the headlines, but it was in fact Motorola's Cliq -- carried by T-Mobile and also an Android phone -- that helped build Motorola's smarpthone buzz. Cliq has been available to existing T-Mobile subscribers since Oct. 19, and will expand to the wider market on Monday. It sells for $200 with a voice and data plan and sports Motorola's MotoBlur custom interface. Jha and his team can ensure that whatever happens in 2010, they closed out 2009 with two strong new smartphone entries.

5. Motorola Knew To Abandon A Mobile Loser

Let's not forget that Motorola's initial plans to return its mobile division to a state of strength involved Microsoft and Windows Mobile. Motorola said at the beginning of the year it would embrace Windows Mobile wholeheartedly, but when it swore allegiance to Android six months ago, it wasn't lost on a single observer that any mention of Microsoft and Windows Mobile was conspicuously absent. That move by Motorola looks portentous in retrospect; Microsoft's struggle to gain a foothold in mobile OSes has been well-documented, and it's not too early to call Windows Mobile a major sore spot for the software giant.