Based in Chicago ever since it was founded in 1928, Motorola is contemplating a move to California, according to co-CEO Sanjay Jha.

When Motorola splits in two next year, Jha said he may transplant the handset and set-top box units to Silicon Valley. "We'll go where that talent is, and right now, that looks like California," Jha said in an interview with the Wall Street Journal.

This makes a lot of sense: Software acts as the biggest differentiator for cell phones and other gadgets nowadays. And much of that developer talent resides in California. Nokia has established a research presence in Silicon Valley in recent years. So has smartphone software maker Symbian. Apple, Google and Palm are based in California. Last, but not least, Qualcomm, where Jha used to work before joining Motorola, is headquartered in San Diego.

But uprooting Motorola's existing engineering and marketing talent won't be easy. Motorola lost a lot of great employees over the past several years, as it struggled to turn the business around. And it could lose more staffers if Jha decides to go ahead with the move.

After retrenching for five consecutive quarters, sales of cell phones returned to growth in the fourth quarter of 2009, reports consultant IDC. In that period, mobile phone sales rose 11.3%, and vendors including Nokia, Samsung and LG shipped 325.3 million units worldwide. Full-year sales were still down 5.2%, to 1.13 billion handsets vs. 2008, according to IDC. IDC analyst Kevin Restivo called the rebound "dramatic."

Yet, some vendors failed to benefit from this dramatic growth spurt. Take Motorola. The company reported yesterday that while its smartphone shipments increased in the fourth quarter, the company's overall unit sales dropped, and its market share declined from 4.7% of the global market in the third quarter to 3.7% in the fourth. Motorola expects further shipment declines in the first quarter of this year. Based on IDC numbers, Motorola clearly underperforms the market.

Nokia, on the other hand, has done well. The company, which also reported on Jan. 28, announced it has gained some market share. Clearly, even as the market begins to rise, it's not lifting all boats, though.

Fewer people shopping for smartphones were interested in buying Apple's iPhone in December than in September, according to a new ChangeWave Research survey. Last month, 28% of more than 4,000 people surveyed were planning to buy an iPhone in the next three months. That's down from 32% in September.

What happened? Some of the decline in consumer interest could be due to the fact that the latest iPhone model, released over the summer, is getting older, and many people who wanted to buy it have already snapped it up. What's more, competitors such as Motorola, HTC and Research In Motion have come out with new, compelling smartphones in the last couple of months. Motorola's Droid in particular is gaining traction; the gadget is based on Android operating system that allows users to buys and use apps similarly to the iPhone. In December, some 21% of the survey respondents were planning to buy an Android-based smartphone in the next 90 days, according to ChangeWave. That's up from 6% in September.

It's not a big leap to assume that Android-based smartphones are starting to eat in a major way into iPhone's mindshare with consumers.

Consumer awareness of Android, an operating system for smartphones pushed by Google, is on a steep climb, which bodes well for vendors like Motorola and HTC. Of consumers expecting to shop for smartphones in the next three months, 17% are considering an Android-based device, according to comScore's new survey of 2,300 consumers. In fact, devices based on Android aren't far behind the iPhone. Some 20% of consumers are in the market for the Apple device.

The results represent a stark contrast to consumer sentiment of only a few months ago. In August, 7% of consumers were contemplating buying an Android device, while 21% of them were considering the iPhone.

The splash that Motorola's Droid phone, based on Android, has made recently is partly responsible for increased attention that Android is getting. "In August 2009, just 22 percent of mobile users had heard of the Android, while in November 2009 this figure had reached 37 percent, largely prompted by the Verizon Droid advertising campaign launched in the fall," according to the report. Android may get a further boost next year, when more Android devices should come onto the market. While the Android movement could still get derailed -- for instance, if Google decides to release Android phones under its own brand -- it certainly appears to be on the right track now, and rolling along with an ever-increasing speed.

On Nov. 30, Google announced winners of its Android Developer Challenge 2, a competition to create the best apps for Android-based phones like the Motorola Droid. The overall winners are "SweetDreams," a tool that lets you go to sleep without having to tinker with phone settings; multi-player game "What the Doodle!?"; and "WaveSecure," a tool that protects a mobile user's data and privacy.

It's the latter winner that's perhaps the most surprising: Today, most mobile device makers and carriers still claim that mobile security of mobile devices isn't a problem. But analysts say it might become a big issue as early as next year, as the number of smartphone users explodes. Clearly, Google agrees with the analysts' view.

WaveSecure's software looks to be particularly helpful to users whose phones get lost or stolen. It allows users to track down a phone's location and who is using it, lock down the phone remotely, back up and remotely wipe out the data. Oh, and the software lets users restore the data, too.

After a big run of flashy smartphone announcements, including the Motorola Droid/Milestone and even the BlackBerry Storm2, it was easy for the BlackBerry Bold 9700 to slip in under the radar. But this very solid, if unflashy, handset shows why Research In Motion continues to thrive even in a very difficult market.

The original Bold 9000, which hit the market in May, 2008, has been the flagship of the BlackBerry line. The Bold 9700, available today from T-Mobile for $200 on a two-year contract and on Nov. 22 from AT&T, offers everything the Bold did--sometimes better and sometimes smaller.

Physically, the Bold strongly resembles assorted Curve models, though it retains the Bold's premium look and feel with a metal bezel around the top of the handset and a leatherette back. Like recent curves, it replaces the fidgety track ball with an optical sensor that tracks finger movement on a pad below the screen--a big improvement. It weighs about half an ounce (14 g) less than then original Bold.

This morning, Verizon Wireless announced Droid Eris, a new phone from HTC. The announcement comes on the heels of another, of Motorola Droid, another smartphone device based on Android software developed by Google and its partners. So Verizon Wireless has decided to develop a single brand for all Android-based phones it puts out: Droid, a company spokesperson confirms.

This strategy is a smart one: Currently, very few consumers are even aware of Android, or know what it is. With the Droid brand, Verizon Wireless is likely hoping to change that, and to make Droid phones stand out in the consumers' minds in the same way the Apple iPhone does. Indeed, Android-based phones are highly differentiated products: They are the only phones that can connect to and download apps from the Android Market, an app store for mobile games, calendar and productivity applications. They also can access services such as Google Maps Navigation, which offers voice turn-by-turn directions. It's important to point out these differences to consumers, and a single Droid brand can help achieve just that.

Last Thursday, I went down to Union Square in downtown New York City and ran into Verizon's marketing juggernaut for its new Droid phone.

The new Motorola device, which was released today to the general public, is being supported by the single largest marketing campaign that Verizon has ever launched for a single device.

So what does all that money buy? Well, lots of glitzy TV commercials but also some cheesy live marketing events. As I got off the train at Union Square, I noticed a long line of about 75 people. The people were waiting to get the chance to play a game in which you could scoop up a Droid phone in one of those boardwalk games with the little hand-operated cranes. All that was missing was a carnival barker shouting into a megaphone with a monkey perched on his shoulder.

Verizon is clearly pulling out all the stops to turn the Droid into a hit. And so far, it seems to be working.

-- Spencer Ante also publishes the Creative Capital blog. Click here to read more.

Brocade is OEMing Motorola 802.11 wireless switches, access points and security products in a move to offer fixed mobile convergence capabilities and provide a wireless services platform.

The number of applications such as games and calendars that developers have begun working on for cell-phone operating system Android has jumped 94% between September and October, according to Flurry, which provides in-app analytics software for mobile devices.

The increased developer hustle and bustle around Android comes as no surprise: In November, Verizon Wireless is expected to launch its first Android phone from Motorola, and the carrier has already started a major marketing blitz around the device. Android-based phones from other makers, like HTC, are selling well. About 20 Android-based devices are expected to come out this year, and 30 more in 2010, according to analysts. As more Android phones get into users' hands, more people will start using these devices to download apps from the Android Market, which currently features more than 10,000 applications. Naturally, developers want to get in on the game.

In fact, I wouldn't be surprised if the Android Market catches up to the Apple App Store, which currently offers more than 85,000 apps, in the number of applications it carries in the next year or two. Consider: By 2012, Android should become the world's second-largest mobile operating system, according to consultant Gartner. At that point, more people will be buying Android-based phones each year than the iPhones. And users of Android devices download as many applications -- about 10 -- each month as iPhone owners do. Since developers always want to make apps for the largest possible pool of users, Android Market's applications count should skyrocket.

In a research note released today, Global Equities Research analyst Trip Chowdhry reports that Motorola is prepping to produce 25,000 to 30,000 units of its new Cliq handset per week. The smartphone is destined for T-Mobile USA.

If these production runs prove to be true, that means that Motorola expects the Cliq to sell as well as Palm Pre, which became available from Sprint Nextel in June of 2009. In the first weeks of availability, customers were pouring into Sprint's stores to get the Pre, and there were shortages. And analysts estimated that Palm produced about 25,000 units per week.

Is it realistic for Motorola to expect the Cliq to do as well as the Pre? Perhaps. T-Mobile has done a good job marketing other devices, such as the T-Mobile G1 from HTC. Since Motorola has staked its whole future on the Cliq and follow-up phones, the handset maker is likely to rev up the buzz about the device as well.

But T-Mobile is a smaller carrier than Sprint, with fewer customers. And that might limit the Cliq's sales.

On Oct. 6, Motorola introduced its so-called signature apps for its upcoming devices based on Android software for cell phones. Created by third-party developers including Accuweather, Comcast Entertainment Group and Barnes & Noble, the apps have been especially tailored to Moto devices' menus. And they could offer a glimpse into a potential problem facing Android.

Moto's signature apps foretell the beginning of a new trend, of handset makers encouraging developers to create Android apps specifically for their devices. Motorola, for instance, promises developers early access to its phones and software tools, and promotion in its ads. The idea is to encourage developers to create apps that work extremely well with Motorola’s new phones. But chances are, these apps won’t work so well on its rivals' Android phones.

Here’s why that’s a problem: One idea behind Android Market was to create a single pool of apps that work on devices from all handset manufacturers, including Android pioneer HTC, Motorola and Samsung. This gave developers a chance to create one app that worked on millions of devices without having to be tweaked – which is what developers had to do in the past. In the past, third-party software makers have had to make hundreds of versions of the same application, and that made development extremely difficult and expensive. The Android initiative was to do away with that problem, and to help participating handset makers to better compete with Apple, which has been super-successful in luring developers to its iPhone.

Well, now it appears that the Android movement is fracturing. And that might make it less attractive to end users and developers alike. Developers may have to tweak their Android apps for them to work well on various makers’ phones. Users may have to sift through the Android Market searching for apps tailored specifically to their devices. That's certainly not the end of the world: Sites like Handango.com offer apps for various handset models successfully. But that adds complexity to the process, and, in many ways, this defeats the purpose behind Android.

Motorola plans to release at least 10 cell phones based on Android operating system in the next six to 10 months, according to a report from Global Equities Research analyst Trip Chowdhry released this morning. On Sept. 10, Motorola showed off its first Android phone, called the Cliq.

The phones will be sold to end users for $39 to $399, Chowdhry says, citing industry sources. And they could, potentially, help Motorola ramp up its market share fast. In the second quarter of 2009, the company claims it held 5.5% market share -- a far cry from the double-digit market share it held several years ago.

Much will depend on which carriers pick up the phones, and how much money they sink in promoting them. But most analysts I've talked to believe the company's share can only go up from here.

I just received an e-mail invitation to a Sept. 10 Motorola event in San Francisco. The invite provides no details on the mysterious event, but it features the fun little robot that represents Android, which is software for mobile phones created by a coalition of companies led by Google.

Clearly, it's not a stretch to call this invite what it is: An invitation to the launch of Motorola's first Android-based phone.

This launch is a huge deal. The ailing handset maker, whose market share has dwindled precipitously in recent years on failure to come up with best-selling products, has effectively bet the company on the success of its new line of Android-based devices. Its first phone's design and capabilities will offer a glimpse at whether Moto has succeeded or failed in that mission.

Blogs are already full of pictures of the phone Moto will supposedly announce; here's a link to one of the more credible ones. Is this phone for real? Will it impress analysts, carriers and consumers alike? We'll have to wait until Sept. 10 to find out.