Motorola unveils new cell phone

November 6, 2009 (CHICAGO) (WLS) -- Motorola's newest cell phone, the Droid, went on sale on Friday.

The Schaumburg-based company hopes it will challenge the popular iPhone and get Motorola back on top in the very competitive cell phone business.

With a lot of flash, Motorola is previewing the Droid on Michigan Avenue.

"To somebody who is not gadget crazy like myself, a substitutable good which is what this is trying to be to the iPhone would be a pretty good bet," said George Guasso.

Motorola has not had a new hit phone in at least two Christmas retailing seasons. Analysts say one more year would have meant a dire future for the company's beleaguered handset division. In the first quarter of this year it lost $509 million. The year before, it lost $418 million.

"It is sort of a new test but it is one that if it succeeds it is the right direction for them to continue on," said Jason Shah, JSDF LLC, software consulting firm.

The key for Motorola is placing a bet that making its new phones with Google's android software is the way forward. Analysts say it is perhaps the only way the company that used to make half the cel lphones in the world -- and now makes 6 percent -- can really move forward.

Android is open-source software. It allows anyone, including consultants like Jason Shah, to use it to develop applications -- or apps -- users of a new hit from Motorola will like and buy. Shah says now the company's track record in innovation needs a new chapter.

"They have developed a layer that sits on top of Google android called 'motoblur' which is a way for users to consolidate all of their contacts from Twitter, Facebook from all their social networks into one place.

A Motorola spokesman would not say that teaming up with Google underlines how much is riding for the company on this new phone.

"It is a great opportunity for us to partner with one of the great software leaders of the world and kind of combine those two great strengths together and deliver this proposition," said Giancarlo Fasolo, Motorola.

It's a proposition some Chicagoans are willing to entertain.

"You have seen a lot of Chicago companies going out like Bank One, and others so Motorola being a Chicago company you really have to support it," said Mario Santarsiere, Chicago.

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