DROID does - but Motorola can't rest on its laurels

Features Marin Perez 13:50, Jun 11 2010

Motorola's DROID has been doing extremely well but this success may not be easy to replicate in the future

Motorola has been crowing about the success of its DROID phone for Verizon Wireless lately and I'm happy to see the company doing well. I hope Motorola doesn't take this success for granted, though, as it faces many challenges in climbing back to the top of the cell phone heap.

For a long time, Motorola's handset division has been a drag on the company - I'm talking about losses in the billions for some quarters. This is particularly embarrassing because Motorola practically invented the cell phone but it wasn't able to replicate the magic it once had with the RAZR.

Everyone remembers the RAZR, as it was the first mainstream phone that could double as a fashion accessory. The company spent too much time milking this line and it wasn't able to develop consumer-friendly software or adapt to trends like the demand for applications.

That all seemingly changed overnight with the release of the DROID late last year. Motorola finally had a stylized, high-powered handset that could appeal to the masses. The stock Android user interface wasn't as polished as the iPhone but it had multiple capabilities including access to the wealth of programs in the Android Market. The smartphone was a runaway success and Motorola co-CEO Sanjay Jha said the company was having trouble creating enough devices to keep up with demand.

But the success of the DROID was sort of a perfect storm of circumstances that won't be easily replicated in the future.

First of all, this was the first high-end smartphone on Verizon that was truly competition for the iPhone. Some may say the BlackBerry Storm was that first major competitor but I know from personal experience that it wasn't. Because it was such a major product, Verizon reportedly spent $100 million promoting Motorola's handset on various mediums. That type of marketing muscle will probably not be done again anytime soon.

Additionally, the DROID showed there was a massive, pent-up demand for highly capable smartphone on Verizon's network. These customers had been jealously eying iPhone owners but couldn't or wouldn't jump to AT&T. As a result, they purchased a DROID and are now locked in to a two-year, long-term contract. The company has probably sold somewhere close to two million units and - aside from the iPhone - the DROID is the phone I see most often in the wild while I'm out and about in San Francisco.

I'm also not too sure how much consumers associate the DROID brand with Motorola. Sure, there's a clear Motorola logo on that device but the DROID Eris and DROID Incredible are both made by HTC and I think mainstream users have tied the brand to Verizon. That was Verizon's intention, of course, but it could impact the appeal of Motorola's other non-DROID smartphones here in the U.S.

The competition is going to be extremely brutal this year, as well. The iPhone 4 is guaranteed to sell a few million units, the EVO 4G is setting the standard for Android handsets and I think the Samsung Galaxy S is going to find a large audience. Things don't get easier near the end of the year, as newer players like Dell and Hewlett-Packard could roll out some lust-worthy hardware.

To be fair, Motorola doesn't appear to be resting on its laurels. We've seen reported shots of the DROID 2 and it seems like a solid upgrade with a faster processor and an updated version of MOTOBLUR. It is also working on a keyboard-less version that should sport a larger screen and a boosted camera too. Finally, Jha has been speaking about pumping out a smartphone this year with a 2GHz processor, which could set a new standard for high-end handsets.

It won't be easy, but if Motorola can continue to innovate on a consistent basis, it can slog back to the top.

Contact Marin Perez via email or follow @Marinperez on Twitter

Sponsored Links