Will Social-Network Smartphones Boost Motorola?

Two years ago, Motorola's Rick Osterloh made a pitch to his bosses that almost got quashed before he left the room. In a 12th-floor conference room at Motorola's Schaumburg (Ill.) headquarters, the 37-year-old software executive proposed creating a line of phones that would use the Google (GOOG)-backed Android operating system and feature software designed for the budding world of social networking. As former Chief Executive Officer Edward J. Zander and current co-CEO Greg Brown listened, several top executives attacked the idea, arguing that Motorola (MOT) already had too much complexity in its product lines. "There was controversy," says Osterloh.

Zander ultimately approved a modest investment. Now, Osterloh's idea is being used not just for one product line but as the leading example of the central strategy for Motorola's mobile-phone business. On Sept. 10 the company is unveiling the first model in its Android-powered line, a phone called Cliq. The phone uses Motorola-developed software, known as Blur, to create a social networking command center, combining every major service—MySpace (NWS), Twitter, Facebook, and more—on one screen. Postings can be typed and zipped to each site simultaneously with one swipe of the phone's touchscreen. Social networking features are embedded in everything from the phone's address book to its e-mail program. "The barrier between people's work and personal life is disappearing," Osterloh says. "We really tried to hit that sweet spot between consumer apps and work [programs]."