Motorola Drags Google, Kodak Into Cell-Phone Business
LAS VEGAS/LONDON – Motorola Inc. (MOT) plans to put Google Inc.'s (GOOG) Internet search technology into the software that runs its mobile phones and work with Kodak (EK) to make on-the-go Web surfing and photo swapping easier, the companies said on Thursday.
This year the world's second biggest cell-phone maker will start letting customers bring up a Google search engine at the touch of a button on some phones, the two companies said.
Motorola also said it signed a 10-year deal to work with photo-technology company Kodak to make camera phones easier to use.
As mobile operators around the world work to add everything from music and video to photography and Web surfing to their offerings, Google, Motorola and Kodak want to be the driving forces to make such services easier to use.
Google Chief Executive Eric Schmidt said his company, which runs the world's most popular Web search engine, made the agreement because he believes that in the future mobile devices will be where consumers access the Internet most often.
"People are going to spend all their time on it eventually," said Schmidt, referring to the mobile Internet. He expects that much of that usage will come from the combination of phones that can pinpoint user location with its localized search software.
"The most obvious thing is maps," Schmidt said at Motorola's press event at the Consumer Electronics Show in Las Vegas, the largest electronics show in the United States.
The companies said their three-year agreement is not exclusive, but Schmidt said Motorola was the obvious partner because of the success of its Razr phone, which has become a design icon.
At least one analyst believes that quicker access to Web search will lead many more people to use the Web on cellphones.
"The Google news is perhaps the most significant I've seen in a long time," Oppenheimer analyst Lawrence Harris said.
Google's Web site is the first port of call for millions of Web users.
Motorola is hoping the Google-enabled phones will win it increased orders from mobile operators which have struggled to increase data revenues, especially on third-generation mobile networks that allow high-speed web access.
"We're convinced that having a great experience on the handsets not only helps us sell more handsets but also enables us to command a higher ASP [average selling price]," Motorola's Corporate Vice-President Scott Durchslag told Reuters.
Durchslag said consumer trials with Google-carrying phones had shown that the power of the search giant's brand had significantly increased Web access using mobiles.
Motorola plans to launch the phones with Google this year, and Schmidt said Google would work to embed its search engine in all of Motorola's future phones.
The cellphone maker also hopes to increase use of photo-swapping on mobile phones by working with Kodak, bringing out phones this year that will send, ready for print or store a photo at the push of a button.
Kodak has also agreed to supply Motorola with camera hardware and software for its phones, and the companies plan to share intellectual property as part of the agreement.
They will also work together to bring out more advanced camera phones this year and next year with new features including photo editing software and easier ways to swap photos and save them in online albums or other Web sites.
"Think about visual IM [instant messaging]," said Ron Garriques, head of Motorola's mobile phone division, suggesting that swapping pictures with someone on the other side of the world may become as quick and easy as sending an instant message over the Internet.
Garriques said the Kodak agreement was not exclusive, but both companies expect to work more closely with each other than with rival photography or handset companies.
Motorola also introduced a ski jacket with embedded electronics, including a speaker in the hood and a control panel in the sleeve that lets the wearer take calls or play music on a digital music player.
The controls connect to a phone or music player in a user's pocket, employing Bluetooth short-range communication technology.