UPDATE: Verizon Unveils Droid X; Google Ups Android Estimate

23rd Jun 2010 21:45

(Updates to include additional executive comments) By Roger Cheng Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Google Inc. (GOOG) upped its estimate for the number of Android phones sold each day as Verizon Wireless unveiled its own Android phone, the Droid X, a day before the next Apple Inc. (AAPL) iPhone hits stores. Andy Rubin, head of Google's mobile business, said during a press conference that 160,000 Android phones are activated each day, up from a prior estimate by Google of 100,000 per day made last month at a developer conference. The Droid X, meanwhile, will sell for $199.99 with a two-year contract when it launches on July 15. Like AT&T Inc.'s (T) plan to allow for early upgrades, Verizon Wireless will let any customer whose contract expires this year upgrade for the standard subsidized price. The device is another coup for Google, which has seen its platform skyrocket in the last few months with a number of high-profile phones. It's also another illustration of the tightening bonds between Verizon Wireless, Google and Motorola Inc. (MOT). "There's definitely a band forming here today," Rubin said, as he sat alongside Verizon Chief Marketing Officer John Stratton, Motorola Chief Executive Sanjay Jha, and Adobe Systems Inc. (ADBE) CEO Shantanu Narayen. Google Chief Executive Eric Schmidt also made a surprise guest appearance to kick off the event. "People are thinking mobile first," he said, touting the strength of the network, software and hardware working together before quickly departing the conference. The device is the latest high-end smartphone from Verizon Wireless to bear the Droid name, which the carrier has attempted to push as its line of high-end phones running on Android. Verizon Wireless sees its Droid line of phones as its counter to the popularity of the iPhone. "It's about building a portfolio," Stratton said in an interview regarding the rapid release of new Droid phones. "There's an incredible growth trajectory." The Droid features a 4.3-inch display, which promises high-definition video output, a faster processor, the ability to run Adobe's Flash software, and a version of Motorola's own customized user interface, called Motoblur. The device is significantly larger than its predecessor, the original Droid. It also has the ability to create a mobile Wi-Fi hotspot for five other devices; the service costs an additional $20 a month. "This is going to deliver an unparalleled experience," said Motorola co-Chief Executive Sanjay Jha. Despite the Droid X's heavy focus on playing high-quality video, Stratton said he is "very confident" in the network's ability to handle the increased data traffic, adding that the company has built its network to handle more than the anticipated spike in data usage. AT&T has suffered from network quality issues as a result of the exploding data demands brought on by the iPhone. The company is working to fix those problems, but they remain in the key media markets of New York and San Francisco. Jha, who also took an indirect jab at the iPhone, said, "we recognize people still use phones as phones," touting the device's three microphones for improved call clarity. For Motorola, the smartphone represents a continued validation of Jha's strategy of focusing his company's resources on high-end smartphones. The Droid X is the second flagship phone to run on Verizon Wireless's network since late last year. The company is expected to have another Droid device in the wings for later this year. The high-profile devices should go a long way towards driving the company's mobile devices unit back to profitability. Jha has called for a return to profitability by the fourth quarter, with the unit slated to be spun off--along with the home set-top box business--as a separate company in the first quarter of next year. Verizon Wireless, which is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD), doesn't see any supply hiccups affecting sales. "We don't expect to have that problem with the Droid X," Stratton said. Supply issues are normally rare for Verizon Wireless, and he noted that Motorola handled the inventory smoothly during the launch of the first Droid, which saw high demand. Verizon Wireless's follow-up Droid device, the Incredible from HTC Corp. (HTCXF, 2498.TW), has suffered from supply issues due to a component shortage. Analysts point to a scarcity of displays supplied by Samsung Electronics Co. Ltd. (SSNHY, 005930.SE), as the bottleneck. Stratton said the company has regularly kept in touch with HTC to address the issue. "Nobody feels worse about the supply issue than (HTC CEO) Peter Chou," he said. -By Roger Cheng, Dow Jones Newswires; 212-416-2153; [email protected] (END) Dow Jones Newswires June 23, 2010 16:45 ET (20:45 GMT)