Motorola, Nokia face brutal battles in smartphone market

Motorola's stock bumped up a decent amount last week after the vendor introduced its first highly anticipated Android device, but the vendor's stock has been creeping steadily higher over the summer as investors hope for a big comeback. Motorola's stock closed at $8.68 a share on Friday, up 8.91 percent.

A check of reviews around the Web yielded some positive comments of the Motorola Cliq, which will go on sale during the holiday season with T-Mobile USA. The same device will sell worldwide in 2010 under the name Motorola Dext. The unique part of the device is Motorola's MotoBLUR user interface, which syncs information from different popular social networking sites such as Facebook and Twitter, email accounts and other useful sources and streams the updates on the home screen. The idea is you don't have to move from application to application. The Cliq also features cloud computing that can preserve users' data on a secure server if the phone is lost.

It looks like the smartphone battle is beginning to center on software. Sure, the slick, touchscreen coolness factor is extremely important, but these devices are beginning to look similar, and you have to wonder how much more can vendors differentiate in that arena.

As such, analysts including Current Analysis' Avi Greengart aruge Motorola should focus on the MotoBLUR concept. He notes that MotoBLUR isn't truly unique since Palm (with the Pre), HTC (with the Hero) and Nokia (with the N900) all play in the same area.

As impressed as folks are with this first Android device, investors are waiting for more. T-Mobile is a good start, but the operator is smaller potatoes (sorry T-Mobile) compared with the likes of Verizon Wireless and AT&T Mobility. I'm guessing we'll see Verizon step up as the carrier for Motorola's second Android device. Indeed, Motorola desperately needs the partnership of Verizon to wage a comeback during the crucial fourth-quarter holiday sales season, which will no doubt be the most brutal smartphone battle we'll have witnessed to date.

Speaking of a comeback, Nokia is waging one in the U.S., but its message got muddled last week in regards to the company's stance on whether its new Linux-based N900 can be customized for carriers--something the vendor has promised to do in general to improve its U.S. market share. Of course, like the N97 Nokia introduced in June, the vendor does not have a carrier partner for the N900.

One day a Nokia executive says Nokia will not alter the software of the new high-end, Linux-based N900 to meet the desires of specific wireless carriers, insinuating that it's in the same league as Apple and Android, which are less about providing customization to operators and more about providing a value proposition to the end user. The next day the company clarified its position in its blog, saying that "a few people are getting ahead of themselves" in terms of drawing conclusions about the company's plans for the N900. "While we have not announced immediate plans to offer an operator variant for the N900, there are many customization points for operators on the N900," the company said. "It would be absolutely incorrect to assume that we will not offer operators the ability to tailor future Maemo devices to suit their needs."

It appears the vendor continues to be caught between its own desire to appeal directly to the end consumer vs. placating U.S. operators. In the U.S., Nokia simply isn't in the same league as Apple and Android. The company's brand is weak, and it has a mixed track record when it comes to attracting consumers to its own services and applications. Nokia simply must hit few home runs with operators first before it can strike out on its own in the U.S. --Lynnette

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