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By Sinead Carew and Alexei Oreskovic
NEW YORK/SAN FRANCISCO, Aug 1 (Reuters) - Motorola onThursday unveiled a new smartphone that consumers canpersonalize with a choice of colors and materials, hoping tostand out in a crowded market and justify the $12.5 billion thatGoogle Inc paid for the ailing handset maker.
The highly anticipated "Moto X" marks the cellphone maker'sfirst flagship device since Google bought the company in 2012,and is its latest attempt to break into a smartphone marketdominated by Apple Inc and Samsung Electronics.
The Moto X will go on sale in the United States at the endof August or the beginning of September for a suggested retailprice of $199.99 to customers who sign a two-year contract atfive of the biggest U.S. mobile network operators.
Google faces a steep climb in its effort to revive themobile phone pioneer. Motorola is betting that it can win overconsumers by offering a huge palette of colors to personalizetheir phones, as well as unusual phone materials such as wood.
AT&T Inc, the No. 2 U.S. mobile service provider, willhave exclusive rights to let its customers customize the phonefrom a selection of 18 colors for the back, two for the frontand seven accent colors for an undisclosed time period.
By emphasizing the ability to personalize the device,Motorola is taking a different tack than many of its smartphonecompetitors, which battle over specifications such as screenresolution and processor speed.
"They're not playing the 'mine is bigger than yours game,'"Avi Greengart, an analyst with Current Analysis, said. "Theirapproach is that this is what consumers actually need.
"I have no doubt there are people who want to customizetheir phones. The question is how many of them," Greengartadded.
Once the global No. 2 phone maker, Motorola's market sharewas down to 2 percent in the second quarter, ranking it 12thamong smartphone makers, according to research firm StrategyAnalytics.
While AT&T will allow customers to customizer their phones,rivals Verizon Wireless, Sprint Corp, T-Mobile US and U.S. Cellular will only be able to offerblack-and-white versions of the device.
In order to promise delivery of customized phones withinfour days, Motorola had contract manufacturing partnerFlextronics International Ltd build a factory in theUnited States.
ANOTHER PHONE LAUNCH
Rick Osterloh, Motorola's vice president for productmanagement, said consumers have shown that they are interestedin putting their personal stamp on a phone, seen in thepopularity of phone cases featuring various colors and sparklysurfaces.
Motorola is still working out which wood to use, he said.Aside from cosmetic concerns, the decision will have technologyramifications because different woods "respond differently" toradio signals.
In addition to industrial design changes such as a curvedback and the choice of colors, the phone's key features found inits camera and a touch-free user interface are the same as whatMotorola introduced in its line-up of new Droid devices lastweek.
Since it bought Motorola, Google has promised that it wouldrationalize the company's phone range, which included as many as45 phones in 2011. Along with the Moto X and three MotorolaDroid phones, Motorola will likely have just one more phonelaunch this year, Osterloh said.
While the Moto X will mark Google's most significant effortto get a foothold in the smartphone hardware market, Google'sAndroid mobile operating system already leads the pack. Thesoftware, which Google gives away free to companies includingSamsung and HTC, is featured on three out of every foursmartphones sold worldwide, according to analysts.
Google primarily makes money off of Android from onlineadvertising when consumers access its services onAndroid-powered devices.
Motorola said that Moto X would become available in Canadaand Latin America as well as the United States around the sametime.
Motorola said it has yet to establish a price for customerswho want to pay the full retail price without signing acontract.
Shares of Google closed up 1.9 percent at $904.22 onThursday.
