Motorola picks Android in mobile phone shakeup. Ammunition for smartphone war?

Motorola is tapping Google's open-source Android operating system to inject new life into its struggling mobile phone division, according to a report in the Wall Street Journal. The company is expected to lay out its new strategy, which could involve laying off thousands and scrapping phone designs that are already in production, when it reports quarterly earnings later this week.

The report said the company will continue to build business-centric devices on the Windows Mobile platform and will build low-end devices on its own internal platform. Phones built on Android would serve the mid-tier market and include things like Internet connectivity and other multimedia functionality.

Earlier this month, T-Mobile released the first Android phone, called the G1, at a time when the 15-month-old Apple iPhone is generating so much buzz that it outsold RIM's Blackberry last quarter. Likewise, RIM - which has been working hard to attract a younger consumer audience - is gearing up for its own launches of the Storm and Bold models to counter the iPhone.

Google, which is not in the business of making cell phones, is banking on an open-source approach that could help spark development of new handsets and features. Putting Google software - Gmail, calendar, search and so on - on an army of mobile phones could help it gain some ground in the smartphone war. Whether it grabs share from Apple or RIM is unknown. Motorola's selection of Android for its mid-tier phones could be good for both Google and Motorola - each giving the other a boost by leveraging their brand names in hopes of attracting users.

For a look at what's at stake in smartphones, check out this video clip.