Google Leans on Motorola With Hardware Push

　　As Google Inc. GOOG +1.86% pushes deeper into hardware, the Internet search giant is pulling Motorola Mobility closer even as it tries to assure device partners that the phone maker won't have an unfair advantage.
　　After spending $12.5 billion to buyMotorola MSI +0.89% last year mainly for its patents, Google is forming tighter connections with the cellphone manufacturer, even debating whether it could be used to produce products like Google Glass, the company's wearable computer.
　　The highly anticipated Moto X smartphone unveiled Thursday, the company's first phone to be produced under Google's guidance, shows that the process isn't a straight line. The phone doesn't, for instance, feature the latest version of Google's Android operating system.
　　The effort is a tricky balancing act for Google, whose Android software has become the leading smartphone operating system largely because it was open to multiple device makers. A growing commitment to the hardware business risks upsetting relations with those partners. But it also provides a hedge as a growing percentage of Android devices are made by Samsung Electronics Co., 005930.SE +0.94% which is working to develop its own operating system.
　　Already Motorola is helping with other hardware projects at Google. Dennis Woodside, Motorola's chief executive, said the company's supply chain head Mark Randall is helping Google think through manufacturing issues for Google Glass and one day might handle production outright.
　　"It could someday be an opportunity," Mr. Woodside said.
　　Google agreed to buy Motorola two years ago when its handset manufacturers were beginning to be entangled in patent disputes around the world with iPhone maker Apple Inc. and others. It was Google CEO Larry Page's biggest acquisition to date. One year into the turnaround, Motorola's market share has declined while its losses have grown.
　　Motorola's share of the global smartphone market has shrunk to around 1% in the first quarter of 2013, down from 3.8% at the end of 2011, according to tech research firm IDC.
　　There were culture clashes as well.Andy Rubin, who led Android operations for eight years at Google until this March, supported keeping Android as an open platform and opposed embracing Motorola more closely, people familiar with the matter said.
　　Some Motorola workers who had developed close relationships with Google employees while working on products before the acquisition found their emails went unreturned after the takeover, the people said.
　　Those tensions were felt during the development of the Moto X, which Motorola's new bosses from Google singled out to develop as its flagship device. Developers of the phone were able to work closely with other parts of Google, but when they sought help from the Android team they often received no response, people who worked there said.
　　There were significant concerns that the Chrome Web browser app wouldn't be able to come preinstalled on the Moto X, because developers couldn't get information they needed from Google as to how it would function on the device, said a person familiar with the project. The problems were eventually sorted out, however, and the Chrome app is the preinstalled browser on the Moto X.
　　Not having a strong relationship may have prevented Motorola from incorporating the latest version of Android, said two people familiar with the matter. Motorola executives say the Moto X will soon receive the software through an over-the-air upgrade. Google's Nexus, a tablet made by Google, will be the first device to ship with the new Android. It was available for pre-ordering July 30.
　　"It's not like we were equally disadvantaged—we were more disadvantaged," one former Motorola employee said.
　　When Mr. Rubin stepped down as head of Android in March and was replaced by Sundar Pichai, who is also the head of Google's Chrome and Apps business, the move signaled to those inside Motorola that the relationship with the Android team would improve.
　　Google declined to make Mr. Rubin available for an interview. In an interview this week, Motorola CEO Mr. Woodside rejected the notion of a bad relationship between the companies under Mr. Rubin.
　　He chalked up Motorola's inability to get the latest version of Android on its new phone to bad timing and said it shows that the company is independent from its parent.
　　"The relationship is good," Mr. Woodside said. "I don't believe there were issues there."
　　Mr. Woodside has spent much of the past year overhauling Motorola and tying it closer to Google. About 70 Google employees have moved over to work for Motorola, taking roles in engineering, marketing and general business functions.
　　Steve Horowitz, Motorola's senior vice president of software engineering, was formerly a Google executive responsible for the creation of its Android operating system software. Lior Ron, a former Google product manager, helped lead the development of the Moto X.
　　Mr. Woodside and most of the rest of the team are based in Sunnyvale, Calif., about a 10-minute drive from Google's headquarters in Mountain View. The CEO said he doesn't expect to lay off any more employees.
　　Mr. Woodside, Google's top U.S. salesperson before getting his current job, acknowledged he isn't a hardware expert. To improve his knowledge, he has met with Motorola engineers who have schooled him in matters such as cellphone acoustics.
　　"It's been a self-education process," he said.