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Motorola’s Dennis Woodside and Regina Dugan at D11: Making Motorola a Risk-Taker Again

Motorola has been going through a lot of changes since being swallowed up by Google.

The company has exited markets, narrowed its product lines and cut thousands of jobs.

But, aside from some rather vague hints from Eric Schmidt and Larry Page, the company has said little about what it will be doing going forward. That changes today as CEO Dennis Woodside breaks the silence and appears on stage at D11.

Woodside is being joined by Regina Dugan, who is heading up advanced R&D work for Motorola.

Though new to Motorola, Dugan isn’t new to the D: All Things Digital stage, having appeared at D9 when she was head of DARPA.

4:05 pm: Walt begins by asking how you take a phone company like Motorola and reinvent it when you haven’t been in that business.

Woodside: Motorola is not any company. The first DynaTac was a Motorola phone. Tons of people had Razrs.

Walt: You are absolutely right, but what have you done for me lately?

Woodside: I sat down with Larry Page and I asked him the same question.

He was very clear. Take it back to the roots of innovation.

Between now and October, we are going to be launching not just a single phone but relaunching our product line. We’ve gone from 40 phones a couple years ago to a handful.

There will be a handful of new devices by October. including one Woodside has with him onstage.

“It’s in my pocket but I can’t show it to you,” Woodside said.

4:09 pm: Walt: What about this rumored hero device?

Woodside: We have a hero device. It’s going to be called Moto X. It’s going to be broadly distributed.

Motorola has always been good at managing power on the device but also at different sensors. The new phone will know when you take it out of your pocket, for example.

“It anticipates my needs,” Woodside said.

4:11 pm: Walt: So it’s self-aware. Should I be afraid?

Woodside: It’s more contextually aware.

Woodside: Lots of mobile phones are designed here but no phones are made here.

“You lose the ability to innovate. You lose the ability to make fast changes.” Moto X is the first smartphone that will be made in the U.S. “We’re building it in Texas.” We are going to employ about 2,000 people outside of Fort Worth at a 500,000 square foot facility. That’s a plant that once made phones for Nokia and at one time employed 6,000 people.

4:13 pm: Not everything will be in the U.S. The processors are from Taiwan; the OLED screens are from Korea, Woodside said. But 70 percent of assembly will occur in Texas.

4:14 pm: Walt: Your market share is pretty small — around 3 percent globally.

Woodside: In the Americas we are in a stronger position, but Motorola likes being the challenger.

4:15 pm: One of the areas we think is really open for Motorola is building a low-cost, high quality market. Feature phones sell for $30; high-end smartphones cost $650. That gap won’t persist, Woodside said.

Walt: What is your relationship with Google and Android?

Woodside: We are owned by Google so there are lots of areas (of Google) that support us. We have no access to Android code. We are managed by their partner managers. There is no advantage that has been conferred to us.

4:17 pm: Walt: Suppose you want to do something with another part of Google, like search or voice.

Woodside: Google agrees to give all Android partners access to its services at the same time. Motorola has brought over people from Google, but when you do that you give up your Google badge.

4:18 pm: On to Regina Dugan, who stole the show two years ago at D9 when she was head of DARPA.

Dugan: I joined a scrappy underdog team. We got to do a lot of epic shit when I was at DARPA.

4:19 pm: Dugan said she told Google that they had a good strategy for not losing with Motorola but a lousy strategy for winning.

A week later she had a job.

Dugan: Marry big science with a good application and you have something. When you take on a really bold vision you yield good results more often. “Boredom is the enemy of innovation.”

4:22 pm: Dugan has brought a few tricks from her advanced research group. First up, authentication. It is so irritating that only about half of people protect their devices.

After 40 years of innovation, we are still authenticating the same way. (Bad passwords, etc.)

Near-term solutions are tokens or fobs with NFC. Another option is an electronic tattoo. “Everybody is interested in wearables. I’m profoundly interested in wearables.”

Dugan is wearing an electronic tattoo from a company called MC10. “What we plan to do is work with them to advance a tattoo.”

Some 10 to 20 year olds may not want to wear a watch, but they would wear a tattoo, if only to piss off their parents.

4:25 pm: Another option is vitamin authentication — a pill with a small chip and a switch. It is powered by a battery charged by the acids in your stomach creating an electronic switch. Your entire body becomes your authentication token.

So forget two-factor authentication. Now we are talking No. 2 factor authentication.

Woodside: This isn’t stuff that is going to ship any time soon. But it is a sign of the new boldness inside Motorola.

“I think what we are trying to do is simply bring Motorola back to its roots,” Woodside said, noting that as recently as 10 years ago the company was taking big risks. If we can bring back that audaciousness and that confidence, good things will happen.

Walt: Should the folks in Seoul and Cupertino be worried?

Woodside: I am sure they are not.

Other big unsolved problems: Screens that break and short battery life.

“The market for Motorola’s products is every person on the planet,” Woodside said.

4:30 pm: Walt: What about this Velcro-covered van parked outside the conference?

Dugan talks about the advances in 3-D printing changing everything.

One of the things we did is we loaded this printer van up with state-of-the-art equipment. 3-D printers, laser cutters, unlocked phones. It’s going 10,000 miles over 12 months, to universities and maker faires.

4:31 pm: On to Q&A: So what was the purchase incentive for Google if they treat Motorola the same as any other Android licensee? Did it just knock a big hole in Google’s balance sheet?

Woodside: I certainly don’t think it knocked a big hole in Google’s balance sheet. People asked the same exact thing about YouTube. Today YouTube is rivaling broadcast networks for viewership.

4:33 pm: Does acquisition mean that Google didn’t have faith in HTC and Samsung?

Woodside: I don’t think it means that at all. I don’t think there is any lack of confidence in the ecosystem.

4:34 pm: How confident are you that Motorola’s next line of phones will actually move the needle?

Woodside: I’m pretty confident of the products we are going to ship throughout the fall. They are unlike other things out there.

It’s a fast-changing market. Samsung in 2010 shipped the same number of devices that Motorola ships today.

I think there is a huge opportunity at the lower end.

4:39 pm: Moto X will be carried broadly by US carriers — something that hasn’t happened in a number of years, Woodside said.

Full D11 Conference Coverage

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