The Short Names

Motorola’s biggest success to date was when it released the thinnest and sexiest device the world had seen. Since then, the handset-maker has struggled to produce anything like it.

Yesterday, everyone was prepared to see Motorola’s latest form factor that would bring it back from the brink. Instead, what we got was an announcement about an innovative new user interface, or skin, that runs on top of the Google (NSDQ: GOOG) Android operating system. In fact, the big unveiling had little to do with the hardware, and in many ways, the upcoming CLIQ phone looks like any smartphone with a slide-out Qwerty keyboard. The interesting stuff is the Blur technology running under the hood.

This marks a huge cultural shift for the company, which in the past has always been driven by hardware design. While we didn’t get the entire story, the picture we gleaned during yesterday’s announcement and during a hands-on demo showed that much of transformation had to do with new Motorola (NYSE: MOT) management—and leveraging assets the company already had.

When Sanjay Jha was appointed CEO of mobile devices, he fast tracked a project being worked on by former employees from Good Technology, an enterprise email service that Motorola acquired, and then sold off in February. So, while other divisions back in Illinois were slashing staff, the Sunnyvale office was quietly picking up employees from Apple and Google in what has become a long two and a half year process to get to market. Rick Osterloh, Motorola’s VP of Product Development for Android Products, couldn’t help but talk about the project, which had been kept under tight wraps for the past year so well. He said it originated with Jha, who was interested in what the former Good employees were working on. “He liked what he saw and he gave it resources.”

Jha explained the importance of BLUR to GigaOm’s Om Malik at Mobilize and how it compares to Apple’s iPhone and RIM’s BlackBerry. He said the platform melds Apple’s idea of having access to tons of applications with BlackBerry’s niche of integrating the apps—like email—deeply into the phone. Together, they have the apps and the integration: “The iPhone has one, BlackBerry has the other, but we have combined them in a meaningful way for social networking.”

Essentially, the BLUR technology enables users to get all of their messages, status updates and other social networking components pushed to them. Motorola’s director of product marketing Dan Rudolph told me during a demo at San Francisco’s Museum of Modern Art that in order to accomplish this, there’s a lot of server-side technologies playing a role. All of the messages are compressed and then sent to the device. The process should help save on bandwidth and battery life, while the consumer will have all the information without having to go out and retrieve it.

Osterloh said the original idea stretches back as far as 2007 when Facebook and MySpace were just taking off. “We had all these people from Good…we thought we could really solve something.” He said the two keys were that messaging services on devices had gotten complicated. (Users had multiple email addresses and also SMS and MMS.) The other thing they looked at was making a consumer-friendly service that would be used by people who didn’t have support from an IT staff at work. “We redid everything. It was focused on business and this is 100 percent focused on the consumer.”

Some of the key services include an online portal, where users could log in and manage their device. If it’s lost, they can ping it and see where it’s located on a map. If it’s been stolen, they can wipe off all of their information and data. Likewise, if you get a new phone, all you would have to do is re-enter a BLUR user name and password and all of the consumer’s settings and preferences would be restored from the wallpaper to which widgets it has on the home screen—a significant time saver. Osterloh: “There was a big hole between what was happening with applications and what was happening with services on the BlackBerry. We see that there’s a need for both…The strategic part is the BLUR part.”

Motorola’s strong software platform may have increased its chances of making a comeback. But form factor is important, too. And, so far, it’s something that’s been neglected on the Google Android platform. To date, most of the devices are bulky, and while some have gotten sleeker, nothing still compares to the iPhone. Motorola’s new CLIQ also falls into this category. While solid and full of the latest hardware, it too is large and strays from Moto’s design background. INQ Mobile’s CEO Frank Meehan announced yesterday that his company was going to start building phones on Google Android’s OS, but pointed to one of the challenges with the platform: “Currently, Android phones on networks that are selling against the iPhone have not performed well. You need to get the experience better.”

So far, Motorola has announced that its first handsets will be sold via T-Mobile in the U.S. and also Orange, Telefonica (NYSE: TEF) and America Movil. How will it do? We’ll have to wait and see.

Maybe it was the anti-trust patrol looking over Apple’s shoulder or the memory of the RealNetworks (NSDQ: RNWK) settlement with Microsoft, but the Rhapsody iPhone/iTouch app—the first in the U.S. to offer on-demand streaming music—slid right through the sometimes tortured iTunes approval process. The app, which went live overnight slated to go live in the next day or two, is a free extension of the premium Rhapsody To Go, which runs $15 a month. Any current subscriber should be able to download the app and log right in; other iPhone and iTouch users can get a 7-day free trial, which should be enough to decide whether or not Rhapsody adds that much value to their mobile experience.

During Wednesday’s not-so-big Apple music event, CEO Steve Jobs made sure to mention that the iPods don’t require subscriptions. That’s right. They don’t (and that lack of subscription option is one of the reasons I didn’t go iPod). But Apple (NSDQ: AAPL) does get a cut from music subscriptions sold through the iTunes App store, like Sirius XM [Ed. Note: the Sirius XM iPhone app is free; premium fees for access are paid directly to the satellite radio company, not to Apple.] and Spotify (now available only in UK and Europe)—and it will make money from “free” Rhapsody, too, since the app uses iTunes as its affiliate music store for MP3s.

—Features: Users have full access to their library, playlists, channels plus new releases and charts. The app also includes streaming Rhapsody Radio, and as mentioned above, the ability to download MP3s on the fly from the iTunes store. A Real spokesman tells me they decided to go that route rather than try their own store or leave purchases out of the app.

—First look: I was an early subscriber of Rhapsody and of Rhapsody To Go since launch (although I’m using a review account for this because of logistics) and have been thinking it’s time to cancel rather than keep two music subscriptions. (Sorry, Rob, but Zune would win that one in my case because it’s my primary music device.) But I have an iPhone now and while I’m still not a big fan of iTunes as my player or music manager, I’m enjoying many of the free music apps. Rafat predicted early on it won’t appeal to people already paying a lot for iPhone service; that may be true for most but it should get a serious look from music fans and could be a hit with iTouch owners. Following the wallet, Real’s biggest competition probably will be Spotify. My early take after 24 hours or so: this app fills a gap for Rhapsody subs and could be the reason I stay on.

—Integration: The so-far seamless integration between the app and Rhapsody.com startled me at first. I wandered into a Paul McCartney playlist in the app, and dipped into a couple of songs I didn’t know well. When I logged into the browser, it knew the last song I’d listened to was Mull of Kintyre and that I’d loaded the Buddy Holly tribute album Not Fade Away. When I added a Bob Dylan playlist in the browser, it showed in the app right away. And, as a test just now, when I added the Green Day Live EP featured on the browser it was in the app MyLibrary in seconds. The best comparison is the Kindle syncing feature that let’s readers pick up where they left off no matter the device.

—Navigation: The artist and album info is easy to read, easy to find. (It would be even better if the text included hyperlinks.) Pressing down on the touchscreen during a song brings up a list of choices—add track to library, add track to playlist, view album info, buy track from iTunes and remove track from queue. Some of the management can get a little complicated between the queue, playlist, library; several times I forgot where I stored a track or an album. Also, as far as I can tell, albums are all sorted alphabetically; I’d like a chronological option.

—Tracks: Real claims more than 8 million tracks. I don’t know about that but so far I haven’t hit any major walls. Some random examples: Grateful Dead, just added a 20-song Top Tracks list with two different versions of Sugar Magnolia. Not Fade Away (a test search I use across services), lots of covers including the usual suspects. I couldn’t find the Katrina & The Waves version of We Gotta Get Out Of This Place but discovered a seriously bad Partridge Family cover, sort of like the Cowsills doing Hair. Part of the joy of subscription is you can wander in just about any direction without extra cost and put what you want in any order you like.

—Quibbles: The touch screen means some actions will happen whether you want them or not. Also, I don’t see how to easily add in the songs I have on the iPhone already or to get it to learn what I like and make the right suggestions.

Update 2: In a release announcing the Pixi, the latest Palm (NSDQ: PALM) device, Palm confirms that the Pre will be discounted by $50 and will now cost $150 with various conditions, rather than the original $200. Update 1: Just as quickly as the $100 discount on the Palm Pre materialized, Sprint has pulled the plug on the offer, telling Digital Daily that it was “put into the system in error.” It will honor the discount for anyone who was inspired to purchase a Pre within the past few hours that the offer went live—but it just reinforces the reputation of marketing mismanagement and poor internal communication that Sprint (NYSE: S) has spent the past few years trying to clean up.

Original Post: Sprint just dropped the price of the Palm Pre to $100 for new subscribers—meaning people can now get the touchscreen smartphone for just $99, with a two-year contract.

The mail-in rebate adds more fuel to the speculation around how well the much-hyped smartphone is selling, since neither Sprint nor Palm have released any stats. Analysts’ reports have either said that the Pre is meeting expectations—even in the face of a solid iPhone 3GS launch—or that sales are well below the benchmark, and falling.

The Pre price cut comes just a few weeks after Verizon (NYSE: VZ) lowered prices on many of its smartphones. The difference is that Verizon’s cuts are perceived as part of a push to clear out old inventory to make way for newer, more expensive phones—not pump up lagging sales—as some analysts, like Piper Jaffray’s Chris Larsen, are suggesting about Sprint’s discount (per FierceWireless).

Palm has maintained that every Pre-related business detail—from getting enough units in stores to meet demand, to creating a developer-friendly app platform—has been on track in terms of company goals. But the best way for Palm to curb rumors (and quell any investor unease) about its so-called iPhone-killer being a dud, would be to release some sales stats during its fiscal Q1 earnings call next week.

Related

• Sprint Needs a Few More Months To Determine If The Palm Pre Is Hit

Yahoo vet Brad Garlinghouse, the author of the infamous Peanut Butter Manifesto, is back in the portal business—and in a big way. Garlinghouse, who left Yahoo (NSDQ: YHOO) last year (part of that company’s brain drain), is joining AOL (NYSE: TWX) as president of Internet and Mobile Communications, spearheading the portal’s global efforts to expand the reach of AIM/ICQ, e-mail and SMS services. His role on CEO Tim Armstrong’s team doesn’t stop there: he’ll head AOL’s Silicon Valley operations from its Mountain View campus and also will be the West Coast lead for AOL’s VC arm, AOL Ventures. The latter fits in with his most gig as senior adviser at Silver Lake Partners.

Communications is one of AOL’s newly devised five strategic areas and, until now, also one of the most glaring gaps in the top exec ranks. Garlinghouse’s background makes him almost uniquely qualified for the job: nearly six years at Yahoo, starting as VP-communication products and leaving as SVP of Communications and & Front Doors. His responsibilities at Yahoo including Yahoo Mail and overseeing Flickr and Yahoo Groups. Before Yahoo, he was CEO of Dialpad.com, general partner at @Ventures.com and worked at @Home Network as well as SBC Communications.

—Moving from peanut butter to … In the Peanut Butter Manifesto, the four-page 2006 memo that wound up in the Wall Street Journal, Garlinghouse explained why PB isn’t a great way to describe a company: “I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular. I hate peanut butter. We all should.” The blunt memo made Garlinghouse a folk hero of sorts, someone who was willing to say the emperor is naked. Now he gets the chance to put his own management ideas to work—within Armstrong’s construct, of course. Can he move away from the “jack of all trades, master of none” approach that too often afflicts portals?

A document filed with the SEC provides explicit details of the eight-month long sale of Virgin Mobile USA (NYSE: VM) to Sprint (NYSE: S) Nextel. The day-to-day account reveals that Virgin Mobile was able to increase the sale price through negotiations with more than one bidder, however, it failed to garner as much money as it initially sought.

The document was filed by Sprint Nextel and is seeking shareholder approval of the acquisition. It says Virgin Mobile USA was initially seeking a price of $6.37 a share, and that a mystery bidder called “Company X” was willing to offer prices roughly ranging between $4.27 and $5 a share during the negotiations. Meanwhile, Sprint Nextel felt strongly about its $5 a share offer. In the end of the process, which lasted from Nov. 4 to July 28, the companies announced that Sprint will pay $5.50 a share for a total of $483 million.

The documents never reveal the identity of “Company X,” but the investment banker says in the record that the bidder would likely be interested “based on its perceived financial strength, similar business model and past management dialogue with Virgin Mobile USA.” To be sure, that may include a range of companies, but perhaps a good guess is TracFone Wireless, another prepaid provider with 11 million users that is a subsidiary of America Movil.

As negotiations picked up in July, the series of events indicates that while Company X was willing to budge on price, it was dragging its heals on fulfilling certain conditions. On July 24, the document says “Company X informed Virgin Mobile USA and its financial advisors that it was withdrawing its offer,” but no other details were provided.