By Jessi Hempel
November 3, 2009

And a few things we don’t love about Motorola’s forthcoming Google-powered phone.

The Droid is a fierce phone. Motorola’s newest smartphone has a number of features that match and even best its biggest competitor, Apple’s (AAPL) iPhone. It has a fast processor. It’s got a large display with almost double the resolution of the iPhone as well as a slide-out keyboard. And it’s got a five megapixel camera with flash and zoom and a video camera that renders your Flip camera unnecessary. Add to that a new sharp-edged form factor straight out of Star Trek. And the marketers have given their campaign a bunch of attitude with their “iDon’t” commercial that pits the Droid directly against the iPhone.

But is any of that going to be enough to woo iPhone fans to Motorola’s new device? As I wrote in a September feature, the company has a lot riding on it. Thanks to a massive marketing push by Verizon Wireless (VZ), plenty of excitement is building for the Droid’s November 6 launch. But just a year ago there was a lot of similar hype around RIM’s Storm, which was also going to take on the iPhone. Though initial sales were pretty good, the smartphone received lukewarm reviews.

Motorola’s new offering will have to prove itself once the hype dies down. And with so many Android-powered devices coming to market in the next few months, it may be hard for the Droid, which Verizon Wireless will sell for $199 after an $100 rebate with a two-year contract, to stand out.

Fortune received a Droid to test this morning. I powered it up, and a monotone robotic voice uttered “Droid.” Here are five things I think Motorola (MOT) has done right with the Droid…and a couple features I miss.

  1. THE NAME Motorola’s first smartphone had too many monikers. Launched on T-Mobile (DT) and powered by Google’s (GOOG) Android, it was called the Cliq with Motoblur. The Cliq was the name of the phone and Motoblur was the social software. The launch event left some members confused, and minutes after, I asked him directly whether he thought the jumble of names had been confusing. Jha agreed it was confusing, saying, “The feedback is good but it has taken ten or fifteen minutes to have the ‘aha’ moment.” He said Motorola would improve, and it’s clear that with the launch of the Droid, it has. In one syllable, the “Droid” signals a new type of device.

  2. THE KEYBOARD Motorola’s slide-out keyboard is durable and intuitive. It doesn’t have the loud click that the first Android phone, the T-Mobile G1, had. (Try checking your emails on the sly during a meeting, and that clicking sound will blow your cover.) A toggle pad to the right of the keyboard allows you to navigate much like a BlackBerry trackball. In fact it’s the keyboard that makes the device an attractive alternative to RIM’s BlackBerry for the enterprise market. On November 2, a Citigroup analyst made headlines for cutting his ratings on RIM (RIMM) while upgrading Motorola after he reviewed the Droid.
  3. GOOGLE MAPS NAVIGATION The Droid is the first phone to have Android 2.0, the newest version of Google’s operating system. There is not a lot that differentiates it from the earlier version, but these few changes have a substantial impact. This new product is one example. It’s a free beta version of a new navigation service (like TomTom’s or Garmin’s (GRMN)) that offers realtime directions, turn by turn, with Google Maps. My colleague Jon Fortt just wrote about paying $70 for a similar application for his iPhone.
  4. APPLICATIONS Sure, the iPhone has nearly 100,000 applications and right now the Android Market sports just a tenth of that. But quality matters more than quantity. And with so many Android devices expected to go on sale in the next year, many developers are taking resources away from other operating systems to invest in Android applications. CEO Aaron Patzer saw a major boost in users after his iPhone application was featured heavily in Apple’s initial advertising campaign for its App Store. He estimates he added 100,000 users to the site, which he sold to Intuit (INTU) this fall for $170 million. Because his application is so popular, many companies have approached him to develop for their operating systems. “ Microsoft approached me seven times, and they’d offer free support like dedicated engineers,” he says. But Patzer prefers to concentrate his resources. When releases its Android application in March, it will be the only other operating system he plans to support. “I’ll get a lot of leverage with so many devices being released,” he explains. “And the programming language is fairly straightforward.”
  5. SEARCH One of only four buttons at the base of the Droid’ screen is the magnifying glass icon that denotes search. It searches both the Internet and your contacts to compile information. Hold the icon down for a couple of seconds and the phone will prompt you to speak your query. I tried this with several names and each time, the phone actually returned search results for the correct name on first pass.

There are a few things I’ve come to expect in a smartphone that are absent in the Droid. For one, there’s no pinch zoom. Also, there are no “send” and “end” keys. Instead, the Droid offers four new buttons at its base. In addition to the search key, there is a home button, a menu button, and a back button.

But what I miss most is purely aesthetic. It’s black and heavy and sharp-edged. A smartphone is an incredibly personal device, and this one isn’t really my style.

Then again, last season I swore off horizontal stripes, and this year I’m wearing striped sweaters nearly every day.

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