New Droid seeks to out-video iPhone 4 and EVO 4G

Not to be outdone by Apple (NASDAQ:AAPL) and AT&T (NYSE:T), Motorola (NYSE:MOT) and Verizon Wireless (NYSE:VZ, NYSE: VOD) today introduced their own souped-up version of the signature Droid smartphone, which like the iPhone 4 focuses heavily on multimedia and video. But while the latest version of Apple’s iconic device is designed for generating video content and communications, the Droid X’s powerful hardware core and new services gear the device toward consuming massive amounts of video content as well as producing it.

The 4.3-inch Droid screen is huge even by smartphone standards, and the device has a lot of hardware to back it up: a 1 GHz processor (one of the first implementations of Texas Instruments’ (NYSE:TXN) new Omap 36X platform), an 8-megapixel camera capable of recording 720p HD video, 512 MB of RAM and 8 GB of onboard storage which can be expanded to 40 GB with memory cards. “If you look at this device, you’ll see we’ve taken our game to the next level,” Motorola co-CEO Sanjay Jha said at the device’s New York unveiling.

But more significantly VZW announced a slew of new services specifically designed to utilize those new video and multimedia capabilities. One of the first new Android apps made for the device is Blockbuster on Demand, which will allow customers to stream rental movies and TV shows to the Droid or buy them for download directly to the phone. The service is intended to be multimodal, so movies purchased or rented from the Droid can be viewed or downloaded to a computer or digital recorder feeding a monitor or TV, beating AT&T to the punch on its own three screens strategy—at least as far as the phone is concerned. AT&T, which already supports Netflix movie streaming over 3G for the Apple iPad and will support it for the iPhone when Netflix releases the app later this summer.

VZW, however, isn’t stopping with movies. It has also inked a deal for a new version of its NFL Mobile application, which not allows customers to stream live games over the 3G network, but has special alert features that will notify a customer when key plays in pre-selected games are about to occur. For instance, when the Dallas Cowboys enter the opposing team’s red zone, a text alert will be triggered that can be used to automatically activate the app, allowing the customer to watch the touchdown drive unfold live.

Verizon’s V Cast video content library has also been optimized for the Android OS, allowing customers to watch TV shows and even live sport events such as FIFA World Cup matches on the large-format screen. The Droid will also be one of the first devices to support Adobe Systems’ (NASDAQ:ADBE) new Flash 10.1 multimedia player—a technology Apple has shunned--available as an over-the-air update when the newest release of Android, version 2.2, is pushed to devices later this summer.

Verizon is calling the device a pocket-sized home theater, and with the addition of an HDMI cable and Digital Living Network Alliance (DLNA) technology, the Droid is clearly intended to sit in the middle of a home entertainment network connected to the TV, game console or PC – either through a physical tether or Wi-Fi. VZW and Moto have placed some restrictions on what content can be shared over those networks—a copyrighted Blockbuster movie, for instance—but any content without digital rights protection can be streamed or transferred between elements of the home entertainment networks easily. Due to the power of the OMAP processor and its HDMI interface, the Droid can be used as a multimedia server unto itself, rendering user-generated 720p content on an HDTV.

The form factor and video capabilities of the Droid draws close comparisons to the HTC EVO 4G, which shares many identical features, from screen size to camera resolution to processing power. But the EVO’s video focus also has the advantage of Sprint’s (NYSE:S) 4G network. The Clearwire (NASDAQ:CLWR) WiMax footprint, while still limited in scope, supports much greater speeds and, more importantly, better efficiency in delivering high-bandwidth services such as video. While Verizon is clearly trying to match or outdo Sprint and AT&T in video services, it doesn’t yet have the network to back it up. Verizon plans to launch its own 4G long-term evolution (LTE) network later this year, but the Droid X will remain an exclusively 3G device.

VZW fully expects the Droid X to generate huge volumes of video traffic on its network, but the operator believes its 3G EV-DO systems won’t be overly taxed, said Arvin Singh, VZW Illinois-Wisconsin regional director for data solutions. Ultimately, the LTE network will be the be ideal network for delivering video, but the 3G network gives Verizon plenty of capacity to meet video demand while LTE is rolling out, Singh said.

“We understand these video services and the strain they can put on the network,” Singh said. “If we were network-challenged it wouldn’t make sense for us to go down that path… But the demand is there, and we’re able to deliver it.”

Singh added that 4G will only pave the way for more powerful video services, such as video calling and video collaboration. The EVO and the new iPhone are both supporting video calling features today, but the Droid doesn’t even have a front facing camera. But Singh said that while 3G is perfectly capable of supporting one-way video services for consumption, real-time collaborative services are different story. Two-way services such as video calling require not just capacity, but extremely low latency to support any kind of tolerable user experience. Ultimately 4G networks will be able to deliver on both of those requirements, he said.

Verizon is pricing the phone at $200 after contract and a $100 rebate, making it the same price as the first-generation Motorola Droid when launched last year. VZW was expected to institute usage-based pricing plans like AT&T did earlier this month, but instead it kept its unlimited plan in place at $30 a month. But VZW did add one billing caveat. The device will come with tethering and Wi-Fi hotspot features enabled, allowing customers to use the Droid as a 3G modem for other devices. For that service, VZW will charge an additional $20 a month, placing a cap on usage at 2 GB per month with a 5 cent-per-megabyte overage charge.