Friday, August 2, 2013

The Inside Story of the Moto X: The Reason Google Bought Motorola

But the flashy part of the Moto X?s personality is what users might bring to it via Moto Maker, a factory personalization scheme reminiscent of mass individualized products like the Nike iD shoe. A website allows Moto X buyers to customize the phone, choosing from 18 colors and materials for the back of the device as well as different accents for the ring around the camera lens and the volume and on-off buttons. Soon after launch, Motorola will offer actual wood veneers. You can even choose headphones in matching or contrasting colors. Those choosing this ?virtual SKU? also enter their software preferences, and in four days or less receive the phone, ready to use out of the box. (For a limited time after launch only AT&T customers can do this?later, Motorola will open it to its other carriers: Verizon, Sprint, T Mobile and US Cellular.) Just as with the Kindle, the device already knows who you are?so it?s not surprising that Motorola?s VP of supply side and operations is Mark Randall, who left a similar job at Amazon.

What?s more, Motorola will be assembling these phones in a newly acquired factory?not in Tianjin, China but Austin, Texas. (The facility was originally built for Nokia.) Motorola rebuilt the 480,000 square foot factory to copy the exact manufacturing process used in China, except for the brand-new, highly-automated process that can deliver any of the thousands of potential color combinations that customers specify. ?Many supply chain theorists and academics says you can?t do this, but when you tell Google it?s impossible, the reaction is, ?Let?s go do it,? says Randall.

It will be interesting to see what happens in AT&T stores when people are faced with the option of going through a selection process and waiting four days for a phone, or just picking a black and white phone and leaving with it on the spot. ?We?ve done plenty of studies and think there are lots of people who are willing to wait,? says Woodside. ?If you start offering materials like wood, the number goes up dramatically.?

Pure Android?almost. In the past few years Google?s Android partners have tweaked the operating system, sometimes slapping on entirely new interfaces. They do this because they feel that running a vanilla system fails to differentiate them from competitors. Overall, the Android ecosystem is threatened by a trend towards ?forking? different versions. Motorola takes a polar opposite approach?as a division of Google, its mission is to highlight the vision of the Android team, and so its version is as mildly modified as possible. It?s basically a stock build of Android 4.2.2, with most of the customization around the notifications, voice activation, and the camera. This approach positions Motorola to provide more timely upgrades, which have been problematic in the Android ecosystem. ?Nobody?s buying products because of minor incremental improvements to Android,? says Steve Horowitz, Motorola?s head of software (and part of Google?s original Android team). ?So let?s rely on what the Android team does and build experiences that will leverage Google services?and then you see things like touchless control, an entry point to Google Now.?

Ever since the Motorola deal was announced, Google has made a point of saying that its company-owned mobile hardware company won?t get special access to the Android team, and will be treated the same as Samsung, HTC and other Android partners. When Woodside repeated this, saying that, for example, Motorola would have to compete just like its rivals to make the next Nexus phone?a model co-designed by Google to showcase the Android system and other hardware innovations concocted by Google?I asked him what possibly could be different in a Motorola-partnered Nexus phone than the current Googly creation that his team has concocted. He was temporarily speechless. ?That?s a good question,? he finally said before reiterating how important it is for the Android ecosystem to grow and thrive.

When you talk to Motorola?s leadership team, at a certain point, their message is, unsurprisingly, indistinguishable from Google?s. Certainly both parties must sense that Motorola?s handset competitors?even the seemingly-impervious Apple and Samsung?are moving by increments, not leaps. And they smell blood. ?Three years isn?t long term for Google?ten years is long term for Google,? says Arshad. ?We want to create that future of cognitive computing?that?s our goal.?

To do so, Motorola Mobility has modeled its long-range research group, Advanced Technology and Products (ATAP), on an outfit known for delivering blockbusters like stealth bombers, autonomous cars, and the Internet. That?s DARPA, the government Defense Advanced Research Projects Agency. Hoping to get similar jaw-droppers, Motorola hired the head of DARPA, Regina Dugan, who brought along her deputy, Ken Gabriel. ?We asked ourselves?what were the elements that made DARPA so successful, and could you translate it to an industrial setting,? says Dugan. To her, the key was adopting fast-developing technology just at the point where it can be put to use.

Like DARPA, Motorola?s ATAP hires researchers (it calls them Technical Program Leads) for two-year stints?short enough to put pressure on them to work intensely but long enough to bring something to demo. In an unusual move for a corporate group (but standard for DARPA), the program leads contract with outside researchers to develop parts of their projects. ?When we?re trying to solve a hard technical problem, we go where the best people are,? Dugan says. One current project draws on 40 computer vision experts working for 30 entities, including private industry and six universities, hailing from five countries. ?In six months we retired the most significant technical risk of the program,? she says.

Even though the project leads? two-year terms are only half up, some of their work appears in the Moto X?for instance, the password-free NFC token. (Down the road, says Dugan, Google is working on more exotic versions based on temporary tattoos and even edible tokens that you gulp down like pills.) Dugan?s team also contributed to the Moto X?s quick-capture photography and maker-style personalization.

?Some think that it?s hard to get a return on higher-risk projects,? says Dugan. ?I?ve found the opposite. When you focus on those things, you yield returns more often?that?s where the epic shit is.?

In short, Google is doubling down on its massive acquisition fee to make phones that push technology and, not incidentally, promote Android and Google services in general. Building Motorola itself into a profitable entity is not an immediate objective. ?Of course we can?t be a drain on the company forever,? says Woodside, ?but the goal is not necessarily to make massive amounts of money in a short period of time?we have a much longer time horizon than that.?


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