CES-UPDATE 2-Motorola to sell inside-out phone, eyes tablet

Thu Jan 7, 2010 12:30pm EST

(Repeats for wider distribution)

* Motorola also to make phone for Google direct channel

* Google channel phone may have Motorola brand on it

* Consumer feedback positive on Droid, Cliq (Adds executive quotes, phone details, analyst comment, byline)

By Sinead Carew

LAS VEGAS, Jan 6 (Reuters) - Motorola Inc MOT.N said it will sell a new "inside-out" Android flip-phone with a keyboard and display on the outside, and is considering joining the latest craze for tablet computing devices.

Co-Chief Executive Sanjay Jha said the company is mulling making a tablet that is bigger than a typical cellphone as it looks for the best way to combine wireless and computing devices.

Microsoft Corp (MSFT.O) and Hewlett-Packard Co (HPQ.N) are also launching tablets this year, while Apple Inc (AAPL.O) is widely expected to take the wraps off its tablet in late January. [ID:nN06145948]

"The tablet is one answer," Jha told Reuters in an interview with Reuters on Wednesday at the Consumer Electronics Show in Las Vegas. "We're considering lots of things."

Motorola's biggest rival, Nokia (NOK1V.HE), has already branched outside of phones with a netbook computer. Motorola itself is working on turning around its money-losing mobile devices business by focusing mostly on smartphones based on Android, the Google Inc (GOOG.O) mobile operating system.

Jha said Motorola's newest Android phone, the Backflip, will go on sale in the first quarter. It has a full QWERTY keyboard that flips back from the screen, and an unusual track pad that functions like a computer mouse behind the screen.

The device also has a high-resolution display that can be used for watching videos when it is slanted at an angle.

Current Analysis analyst Avi Greengart said the Backflip's success will depend on whether young consumers like it.

"It's definitely different and in some ways different is good because it will stand out on the shelves," he said, noting a lot of competition among several phone makers who sell Android phones. "There's no question. They're innovating with this product in terms of hardware."

Motorola already sells Android phones at Verizon Wireless (VZ.N) (VOD.L) and T-Mobile USA (DTEGn.DE). Jha said those devices had been well received by consumers.

AT&T Inc said earlier on Wednesday that it would sell Motorola Android phones but gave few details. [ID:nN06166574]

Jha said that Motorola will "absolutely" bring out a full-touchscreen device for the U.S. market, and showed off two touchscreen phones to sell in China around the Lunar New Year.

He also said the company plans to make a phone for Google Inc (GOOG.O) to sell directly to consumers -- a day after Google introduced its first own-branded smartphone, which will be sold exclusively on its website. [ID:nN06167276]

The Motorola device for Google's direct sales channel could potentially sport the Motorola brand, Jha told Reuters.

While some analysts have queried whether Google was seeking to break the hold that carriers have over device distribution in the United States by selling handsets directly to consumers, Jha said he sees Google's move as just another way for Motorola to reach consumers.

But he noted that Motorola would not be getting into the contract manufacturing business.

"One of the subsequent devices Google will sell to their direct channel will be made by us," Jha said in the interview. "It's an alternative channel to deliver devices to consumers."

The executive said that while some details were not yet clear, he saw Motorola's strong brand as one of the reasons Google wanted it to be part of its direct sales project.

The executive said Motorola was on track to come out with at least 20 different models of Android phones this year.

(Reporting by Sinead Carew; Editing by Phil Berlowitz and Richard Chang)