Motorola insists it is not a “1-hit wonder” as it primes the technology pipeline for future devices.

Motorola knows all about iconic phones – those devices that change the way the public and the industry looks at handsets. First, there was the StarTAC clam-shell model in 1996 and then more recently the ultra-thin RAZR. Since Apple launched the iPhone in June, however, Motorola has been an outsider.

The company is under a lot of pressure from investors to get back the magic it once had with the StarTAC and RAZR. It has seen its market share fall and earlier this year the handset division reported a sales decline for the first time in years, with device revenue falling 31% in the first quarter compared to a year earlier.

Motorola was the only one of the top five handset manufacturers to lose market share in the second quarter, according to Gartner. The analyst firm says Motorola sold 14.6% of the world’s phones in the second quarter, just ahead of Samsung’s 13.6% and well behind Nokia’s 36.9%. Another research firm, IDC, said Motorola actually fell into third place in global handset sales in the second quarter, shipping 35.5 million units compared to Samsung’s 37.4 million.

NO 1-HIT WONDER
On the bright side, Motorola reached a milestone this year by selling 100 million RAZRs.

Brown: Focusing on innovation

“We don’t intend to be a 1-hit wonder,” says Gregory Brown, named president and COO in March. At a recent behind-the-scenes look into Motorola’s technology innovations, Brown emphasized the company’s patent strengths, innovations such as haptics and its noise-cancelling technology CrystalTalk.

To regain its position in the industry, Brown says, Motorola has to focus on innovation in its labs and design houses, while maintaining close relations with its primary customers, the carriers. “It’s about linking innovation with the front-end customer,” he says. “As great as the innovation is,” he says, Motorola must quickly commercialize it, try it out with customer segments and accelerate production.

A peek behind the curtain into Motorola’s labs, both for handsets and its other divisions, shows there are a number of “wow” technologies in the works. Non-disclosure agreements prevent talking about the specifics. But one way of talking about it is to quote the company’s executive vice president and chief technology officer, Padmasree Warrior, who told visiting journalists and analysts the company’s main focus is on simplifying the user experience.

Warrior: Simplifying the user experience

Warrior says some of the technologies likely to show up in Motorola handsets are haptics, something called “morphing” and a “convergence of communications, content and computing.”

Haptics, used in the RAZR2 launched last summer, provides a vibration when a user touches a virtual key on a phone. Other handset manufacturers also have used haptics in gaming to provide a tactile sensation during play.

There was little for-the-record explanation of morphing on a handset, although Lehman Brothers recently put out a research note on Motorola that suggested a number of new handsets were in the works.

One of the phones, the Lehman note said, is a candy bar phone with a face that lights up in various modes based on how it is being used, “from keypad to music controls for example. The device is also expected to have some tactile feedback so that a user knows something has been input into its smooth black surface.”

DEMONSTRATIONS
There were several off-the-record demonstrations at the press/analyst day showing some of the new handset technologies, while much of the on-the-record information surrounded Motorola’s networking expertise, including WiMAX and GSM’s Long Term Evolution (LTE), as well as in-home connectivity.

One demonstration showed how Motorola is working on the use of cognitive radio and “spectrum sensing” software to allow the use of the so-called “white space” spectrum between TV channels. The white space originally was mandated by the FCC as a buffer so there would be no interference, but Motorola and others (Microsoft and Google among them) are working on technology to eliminate the possibility of interference.

There has been some speculation the FCC, when it auctions the 700 MHz spectrum early next year might leave some of the white space spectrum unlicensed.

As it has in the past, Motorola also showed some of its technology to bring Internet and/or mobile phone services to emerging countries. Because electrical power is often not available in remote regions, Motorola showed solar-powered base stations and solar-powered phone booths where phones could be charged. Several displays showed the use of fuel cells, potentially for use in phones.

Another demonstration used a Motorola phone as a modem connected to a small router to send signals to a normal TV set, providing Internet access to underserved areas.

Bluetooth was used in several demonstrations as a way of sending content such as photos from a phone to a computer or TV set. ZigBee was used in a demonstration in a joint project with Purdue to set up an ad hoc voice network for firemen inside a burning structure. Near Field Communication (NFC) was shown using a phone touching a reader to make a hypothetical payment.

In a demonstration called “Beyond 4G,” lab workers talked about “cooperative wireless” that would provide bandwidth and spectral efficiency beyond what is envisioned with coming air interfaces such as LTE. Cooperative wireless was likened to multiple-input, multiple-output (MIMO) antenna schemes used in WiMAX or 802.11n networking. But the technology will use a second base station, relays or even other mobile phones to set up a distributed antenna system to improve performance.

There also were demonstrations of beam-forming, which is used in Motorola’s WiMAX equipment being installed for Sprint’s Xohm network, as well as a smart antenna technology called “spatial diversity multiple access,” which could be used much like MIMO in a WiMAX network to provide optimal performance for multiple users in a cell site.

Motorola’s two business units – Networks and Enterprise as well as Connected Home – have been performing well in recent quarters, with the only drag to the company’s bottom line from Mobile Devices. So, the latter is the unit most analysts are watching closely for a turnaround.

As Motorola’s Brown says, that will take both technological innovation and business execution. A look behind the curtain shows the innovation is there. The next step is execution.