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BARCELONA, Spain--Motorola still believes in its handset business and is looking for ways to revive it, Don McLellan, Motorola's senior vice president for corporate development and strategy, said during a one-on-one interview at the GSMA Mobile World Congress this week.

Motorola understands the value of its brand, which has been over 80 years in the making, McLellan said. But when the stock dipped to around $10 after the company reported disappointing fourth quarter earnings in January, he and his fellow executives had to do something to show investors, employees, partners, and suppliers that they understood the stock was undervalued and that they were working to fix the problems, he said. A week later, executives said they were reviewing strategic options, including possibly separating Motorola's handset business from the rest of the company.

"We realized the value of the handset business wasn't being recognized," McLellan said. "So we recommitted ourselves to fixing the problem."

While that may be the case, the public disclosure of the review has confused some people in the industry, including many journalists, who have assumed Motorola is looking to sell the handset business. Earlier this week, Greg Brown, Motorola's CEO, told the Reuters news service that he is committed to Motorola's handset business. McLellan reiterated that point in our discussion, although he would not specifically rule out selling the company.

The crux of Motorola's problem is that it hasn't been making phones that people want to buy. In the last quarter, the company's market share dipped to 12 percent. A year ago, Motorola had market share of 20 percent. The last hit phone it had was the Razr.

McLellan recognizes Motorola's challenges. And he said that the company must first and foremost concentrate on making phones that people want to buy. Of course, he and the rest of the Motorola team also understand that this will not happen overnight. Brown said on the company's earnings call that it could be 2009 before Motorola can turn around the business.

The company's lackluster handset announcements at Mobile World Congress this week were strong evidence that the company isn't yet ready for a comeback. The Z6w looks like a Rizr clone, but it supports Wi-Fi and includes a 2-megapixel camera, and a music player. Motorola also announced the W161 and W181, two basic candy bar phones for the low end of the market.

Products Motorola introduced in May also haven't been a huge success. Mostly these phones were nothing more than souped-up versions of previous models that now had 3G, or third-generation, network support.

While simply developing cool new handsets sounds like a simple solution to Motorola's problem, in practice it's not that easy. The problem is that as Motorola loses market share it also loses its scale, which makes it more difficult to make money based on its current cost structure. The "strategic review" will hopefully help Motorola and its partners figure out how to realign its cost structure. Before the company even announced it was thinking of alternatives, it had renegotiated a deal with its chip supplier Qualcomm. As Motorola figures out how to structure its costs, McLellan said, the company can reinvest that money in developing new handsets and getting them to market.

McLellan said the review process has already opened the door to several partners who want to talk about ways to fix the business. But he declined to comment on reports that the company is looking to sell off its infrastructure business to Nortel Networks.

As for how long the strategic review will last, it's hard to tell, McLellan said. One thing is for certain, though: Motorola has a lot of work ahead of it.

Nokia's Remade uses recycled and renewable materials to lessen its environmental impact.

(Credit: Nokia)

BARCELONA, Spain--Nokia is going green.

The No. 1 cell phone maker in the world is showing off a conceptual cell phone design at the GSMA Mobile World Congress that is made of entirely renewable and recycled parts. The phone, called "Remade," was unveiled here during a keynote speech given by Nokia CEO Olli-Pekka Kallasvuo on Tuesday.

The phone is being developed in Nokia's labs. And yesterday was the first time the thin, silver handset, had been shown publicly.

Even the electronic components of the phone will be made of recycled and renewable parts.

(Credit: Nokia)

The device, which has an outer case made of renewable materials rather than petroleum-based plastic, doesn't yet make phone calls. And Nokia has not determined yet if it will actually manufacture the "Remade." But Kallasvuo said it showed what could be done with such materials and also gave insight into how Nokia thinks about its role in the global environment.

BARCELONA--Research In Motion's co-chief executive officer, Jim Balsillie, doesn't seem too worried that the second major outage of the company's BlackBerry service in 10 months could hurt its reputation with corporate customers.

RIM co-CEO Jim Balsillie

(Credit: Research In Motion)

"It was an intermittent delay, a couple of hours," he said. "It's old news. It happened days ago."

Balsillie's comments were in response to a question about Monday's outage and how it might impact the company's relationship with corporate customers. Balsillie had just given a keynote speech and participated in a panel discussion at the Mobile World Congress here Wednesday morning. He declined to answer further questions about the situation.

The BlackBerry outage, the service's second major interruption since April 2007, began at about 3:30 p.m. New York time Monday. Service was restored roughly three hours later, the company said in a statement. No messages were lost. Calling and text-messaging services weren't affected.

Research In Motion said in a statement issued late Tuesday afternoon that the outage was caused by "a problem with an internal data routing system within the BlackBerry service infrastructure that had been recently upgraded." The company has been upgrading capacity throughout its server farms to accommodate growing demand for its BlackBerry services.

This recent snafu and the company's previous major outage in April highlight a key weakness of the company's system, which is that it has a single point of failure.

RIM's service is centralized and works by routing all BlackBerry e-mails through one of two main network operations centers, which are essentially large data centers. One center is located in Canada and primarily serves the Western Hemisphere as well as parts of Asia. The other data center, located in the U.K., handles e-mail traffic in Europe, Africa, and the Middle East.

Of course, the world didn't stop on Monday when people were unable to get their BlackBerry e-mail for a few hours. After all, e-mail was still available the old-fashioned way, on desktop PCs. But the outage was an inconvenience. And as mobile phones become a bigger part of people's personal and business lives, frequent outages of any kind could drive these customers to consider other solutions.

It's safe to say that RIM has built a strong reputation as a reliable service provider that has attracted bankers, lawyers and lawmakers as subscribers. But if the outages persist or even become more frequent, the company risks losing some of these very valuable customers to competitors such as Apple and Microsoft, which also offer smartphones with e-mail capabilities.

Microsoft, in particular, presents a threat since most corporate e-mail already runs on Microsoft software. What's more, corporate users are familiar with Microsoft. Its software is also available on a wide variety of handsets offered from almost every major cell phone maker, including Sony Ericsson, which just announced its first Windows Mobile phone this week at MWC.

There's no question the stakes are high for RIM as competition grows. The smartphone market is the fastest-growing segment of the cell phone market. It grew about 72 percent last quarter for a total of 35.5 million phones sold worldwide. This compares to about 13 percent growth for the total mobile phone market.

BARCELONA, Spain--Yahoo has upped the ante in its campaign to rule the mobile Web.

On Tuesday, the company announced at the GSMA Mobile World Congress here OneConnect, a new tool that allows mobile phone users to aggregate their social-networking updates and messaging in one spot on their phones. The service integrates directly with a phone user's address book and allows people to share status updates and messages from a variety of messaging and social-networking platforms. This means it can provide status updates from Facebook or MySpace.com as well as provide access to e-mail and archived instant-messaging chats.

Yahoo demonstrated OneConnect at the Mobile World Congress in Barcelona.

(Credit: Marguerite Reardon/CNET Networks)

Using GPS tracking, cell tower triangulation and/or near field communications like Bluetooth to get a fix on the cell phone user's exact location, the service can be set up to let people know if their friends are in the same area.

The service sounds similar to one that is offered by a small company called Loopt. This service also allows people to track their friends using GPS and last year the company announced it had integrated the service with cell phone users' address books. But the Loopt service is only available through two carriers in the U.S., Boost and Sprint Nextel. It also costs an additional $3 a month and can only be used on certain handsets.

By contrast OneConnect should be able to run on most mass-market phones that have a browser, said Marco Boerries, executive vice president of Connected Life at Yahoo. Boerries also said the company is working on versions of the service for Apple's iPhone and Research in Motion's BlackBerry. The service can also be accessed from any Internet browser through Yahoo Go 3.0.

Yahoo's OneConnect is yet another example of how the company is pouring resources and efforts into building up its mobile capabilities. Within the past year the company has gotten more aggressive about rolling out new mobile services and striking deals with carriers. Today, Yahoo has partnerships with 29 operators, who combined have more than 600 million subscribers, according to its press release.

Yahoo's hope is that it will become the default access point for mobile phone users accessing the Web. OneConnect fits nicely with Yahoo OneSearch, which aggregates news, weather, financial data, photos, and Web links based on search queries, Boerries said during a demonstration of the service at Mobile World Congress.

But Yahoo isn't the only company going after this market. Rival Google is also making a play in mobile. But many experts say that even though Google dominates on the desktop, the company seems to be lagging Yahoo in capabilities on mobile devices.

The two companies have taken different strategies in addressing the mobile market. Google is building its own mobile phone software in an effort to integrate its services into devices. By contrast, Yahoo is attempting to address the current phone market and is even integrating its competitors' services on this new OneConnect platform. For example, Google Talk and MSN Messenger will be aggregated as a part of the OneConnect product.

The competition between the two companies is heating up. Also on Tuesday at Mobile World Congress, Yahoo announced that its OneSearch service will be the exclusive search tool for T-Mobile's European customers starting in March. Google said Tuesday that its search tool will be embedded on the four phones Nokia introduced on Monday. Google search has previously been available on Nokia Internet tablets, and last year Nokia announced that the N95 8GB supported YouTube, the video-sharing platform owned by Google.

BARCELONA, Spain--The Internet is the future of mobile and carriers need to be more selective about the technologies they choose if they want to succeed, Vodafone CEO Arun Sarin said during his keynote speech here Tuesday.

Sarin, who was speaking on the second day of the GSMA's Mobile World Congress, said that mobile operators need to be at the forefront of developing new services for cell phones, such as music, games, and video. If they don't take an active role now, he said, they risk losing their relevance in the market.

"Operators need to invest to bring important mobile Internet services to life," he said. "We can't sit back and become bit pipes."

Sarin also encouraged the industry not to get into a technology standards war between emerging 4G wireless technologies WiMax and LTE. And he called on the industry to combine the two technologies into a common standard so that the research and development community will not be split between dueling technologies.

"The old debates around TDMA, CDMA, and GSM weren't very productive," he said. "So we need to encourage folks to merge WiMax into LTE."

He also encouraged operators and handset makers to look at Apple's iPhone as an example of how to improve user interfaces. And he suggested that carriers consolidate the number of operating systems they use on their handsets to ensure that new applications and services are launched quickly. He said that Vodafone, which is the largest carrier in the world in terms of revenue, has between 30 and 40 operating systems working on its network today.

"I'd argue that is too many," he said. "There's no way that an application developer can develop applications for 30 different operating systems. We have to narrow the range to three, four, or five."

He was careful to note that the mobile industry is not looking for any one company to monopolize the mobile operating system market, the way Microsoft dominates the PC operating system market.

He said he welcomed new entrants, such as Google, which announced in November its Android mobile software. Several companies are showing demonstrations of the software on prototypes at the Mobile World Congress. But Google's emergence in this market has also sparked debate over how many open operating systems are actually needed. Sarin said he didn't care if operators and handset makers use Symbian or Microsoft's Window's Mobile--or Google's Android or the open Linux operating system from the Limo Foundation. Sarin said that the market will ultimately decide but also noted that the GSMA might provide guidelines to help narrow the playing field.

BARCELONA, Spain--Mobility means different things to different companies. For Cisco Systems, it means more than just taking your handset or MP3 on the go.

It's about connecting any device to any network from anywhere at anytime.

"This will be the next phase of the Internet," Cisco CEO John Chambers said at an event on Monday previewing a keynote address he will be giving Tuesday morning at the GSMA's Mobile World Congress here. This is the first time ever that Cisco, the leading supplier of IP infrastructure equipment in the world, is addressing the cell phone industry in this forum.

In many ways it's fitting that Cisco, the company that has essentially helped build the Internet, would be turning toward mobile. And it's this focus on the network that has shaped Chambers' views on what mobility really means.

"Most people talk about mobility in terms of a device," he told analysts and reporters Monday. "But the challenge is to think of mobility as the ability to connect any device to any content at any time, anywhere in any mode. It really goes across a combination of networks."

Chambers said that applications and the information that users are trying to access are what should be mobile, not the device itself. And it shouldn't matter whether the information is accessed on a wireless network or over one that is wired.

He said a hybrid approach is the most likely way to address consumers' needs. In some cases, a wired broadband network will be the best choice, while in other cases a wireless infrastructure will serve consumers' needs better.

One thing is certain: Cisco doesn't see a single technology as the answer. Chambers said the company would keep its options open as it evolves its wireless and mobile strategies. For example, even though Cisco recently paid $330 million to buy the WiMax start-up Navini Networks, it doesn't mean the company will push only WiMax solutions. In fact, he pointed out the danger of getting into a religious technology battle.

"You can't fall in love with one technology over another," he said. "There are lots of people who would have told you that ATM to the desktop was the best solution. But it was fast Ethernet that won the day."

BARCELONA, Spain--Prototypes of the first mobile handsets using Google's Android software debuted at the GSMA's Mobile World Congress here on Monday, and I got a sneak peek at a demonstration.

Google launched Android, an open development platform in November. Phones sporting the Android software are expected out later this year. Google also announced the Open Handset Alliance, a consortium of 34 handset manufacturers, carriers and chipmakers that have said they plan to support Android products and services.

I was one of several journalists to get a private demonstration of Android at the ARM Holdings booth here at the show. CNET News.com reported last week that ARM was planning to show off a prototype.

ARM's technology is found at the heart of almost every mobile phone on the planet. The company designs the processor cores that companies like Texas Instruments, Samsung, and Marvell manufacture into chips that run cell phones and smartphones.

A look at Android at the ARM booth here at MWC in Barcelona.

(Credit: Marguerite Reardon/CNET News.com)

ARM has the Android software running on a prototype device using the ARM9 processor technology, which is already two generations old. The mocked-up handset resembled a full QWERTY keyboard smartphone, like Research in Motion's BlackBerry. But Bob Morris, director of platform solutions for ARM, said the ARM9 technology used on the demonstration prototype is actually used on lower-end handsets sold to the mass market, which means the functionality being demonstrated could be done on most phones sold today.

For the most part, the "welcome" screen on the Android prototype looked no different to me from that of a Windows Mobile phone or many other feature phones I've seen. There were icons on the bottom of the screen, indicating a browser or map tool. And the icons could be clicked to launch the applications.

My initial thought was, "What's the big deal? Android doesn't look like it enables anything different from what everyone else offers."

But James Bruce, North American mobile manager for marketing at ARM, said that it's not so much what Android allows cell phone users to do, but rather what it doesn't require handset chip and device makers to do.

"Android provides a complete application framework, which can be put on chipsets with a lot less work," he said.

In a nutshell, Android should simplify the process of getting a new phone and new applications to market. Today, the cell phone market is extremely fragmented. Every manufacturer has its own operating system for phones. And very often even different models of handsets are developed using proprietary software. This makes it difficult for handset components makers, application developers, and the handset makers themselves to develop new products and services quickly because they have to design functionality for each software iteration. Even the most basic functions like SMS could require different programming from one brand of handset to another.

Android is supposed to alleviate this problem, because it provides a common operating system and development platform that has all the basic functionality baked in. But the software, which is based on a version of Linux, is also open enough to allow application developers to design new applications and services for the device.

While this sounds like mobile phone nirvana, there's one snag. Android isn't the only mobile platform out there. Microsoft's Windows Mobile offers all the same functionality. And so does Symbian, which is used by Nokia and Sony Ericsson. Together these companies account for nearly half the entire cell phone market. And to complicate matters even more, there are several Linux groups also developing open platforms for mobile phones.

One such platform developed by the Limo Group, claims to be gaining traction among the Linux community and says it will soon become the unifying Mobile Linux platform.

So with that in mind, there are at least four distinct operating systems for mobile devices. While this is a huge improvement over the hundreds or even thousands of software operating systems running on phones today, four still sounds like too many to me.

Bruce conceded I might be right. But he said ultimately the market will decide how many operating systems it can bare. And he believes the mobile pie is big enough to support several competitors.

"The mobile phone market is huge," he said. "Over a billion phones are shipped worldwide every year. So even if a company can capture five or 10 percent, they can still do well."

BARCELONA, Spain--Mobile Internet search and advertising start-up JumpTap said Monday that it will provide search and advertising services for seven TeliaSonera mobile carriers in Europe.

Under the terms of the deal, JumpTap will provide search and advertising technology for TeliaSonera's operators in Sweden, Spain, Denmark, Finland, Norway, Estonia, and Lithuania.

JumpTap is what is known as a "white label" technology provider. It develops the technology and mobile operators license that technology and use it to provide a service with their own brand on it.

Mobile search and advertising are relatively small markets today, but experts expect spending to pick up within the next few years as more mobile users figure out how to access the Internet from their handsets. Market research firm Gartner predicts that mobile advertising will grow from less than a $1 billion in revenue worldwide in 2007 to about $11 billion in revenue in 2011.

This is a major deal for JumpTap, which already has deals with 16 carriers, including Virgin Mobile, Boost Mobile, AT&T and Telefonica.

Still, JumpTap and other white label search and advertising providers, such as Medio, are going head-to-head in this market against Google. Even though, some critics say that Google's success in mobile isn't guaranteed, the company is in a strong position, since it is the most well known search and advertising company on the desktop Web. And since many people around the world associate Internet search with Google, white label providers and the carriers that use them might have a hard time getting consumers to use their search tools.

BARCELONA, Spain--Nokia pushed its mobile navigation service to the next level on Monday with the announcement of the latest version of its Nokia Maps service at the GSMA Mobile World Congress here.

The initial version of Nokia Maps, which was announced at last year's edition of this wireless show, was developed for people who wanted navigation while driving, essentially replacing the need to have a separate navigation device, like those offered by Garmin or Tom Tom. On Monday, Nokia took the navigation service a step further by announcing Nokia Maps 2.0, which is geared toward pedestrians. This version of the service is still in beta and is available for download on the Nokia Beta Labs site. (The current version of the service is available for free for select devices on Nokia's Web site.)

Nokia Maps 2.0 provides visual turn-by-turn directions from one place to the next and it can give information about surrounding buildings and streets to help users orient themselves. When used with the new 6210 Navigator phone, which is one of four cool new handsets Nokia announced Monday, the service points users in the direction they are walking by using an embedded compass.

But Nokia didn't stop with navigation. For a fee, users can also access multimedia tourist guides from companies like Berlitz that feature photos, video, and audio streams about the area. For another optional fee users can also get real-time traffic updates with dynamic rerouting in 18 European countries. And the latest version of the service also provides maps with transit information in 17 cities so that users can find the closest metro stop.

Currently, Nokia Maps is available only on a handful of phones. But Nokia plans to introduce a version of the service for its Series 40 handsets in the first half of the year. Nokia's Series 40 phones are made for the mass market. They accounted for a large portion of the more than 437 million devices that Nokia shipped in 2007.

Nokia also announced two new navigation-specific handsets with the launch of Maps 2.0, the Nokia 6220 Classic and the Nokia 6210 Navigator,which has an embedded compass for pedestrian navigation.

Nokia also announced two new N-series handsets, the N78 and N96, which can also be used with the new mapping service.

I'll be taking a tour of Barcelona later this week using a Nokia phone and new Nokia Map 2.0 service, so stay tuned to see how the real-life test drive goes.