After a few weeks of mysterious adverts promising a better alternative to iPhone, Motorola’s $200 Droid phone finally hit the shelves in Verizon wireless stores on Friday. Unsurprisingly, the launch failed to attract anything like the frenzy of an iPhone launch, which had people camping out for days at its peak.

Still, all the advertising, and the positive reviews from bloggers and gadget gurus including David Pogue and Walt Mossberg, did help to lure some customers to Verizon stores.

Tech website Cnet’s Marguerite Reardon said that she found about 100 enthusiasts lining up for Verizon’s special midnight opening in New York under what could hardly be described as balmy weather conditions. This morning, in a follow up story, her headline read “Slow start for the Motorola Droid?”.

In a research note entitled “Droid is no iPhone, not even Storm,” Jefferies analyst Bill Choi said the launch didn’t compare well with Verizon’s launch of the  much criticized BlackBerry Storm last year.

But Choi noted that store traffic was higher than usual in the locations he checked out and he said “anywhere between 5-7 people huddled around the Droid station at any given time.”

While some of the Droid phones being sold today are HTC’s new cheaper device, dubbed Droid Eris, Choi noted that all stores were reporting far better demand for Motorola Droid than that of HTC.

The “Motorola brand is helping and people really like the keyboard” said Choi who estimated that Verizon could sell as many as 750,000 of the Motorola Droid devices by year end.

That’s no iPhone, but it’s somethign, especially for Motorola’s Sanjay Jha who is betting the future of the entire company on Google’s Android system.

(Reuters Photo of Motorola’s Droid)

Apple’s iPhone launched in China last Friday with plenty of fanfare, but the sales numbers so far appear a little light. China Unicom, the iPhone’s carrier in the country, said Tuesday it has signed up 5,000 iPhone subscribers since the launch, below what some analysts were expecting.

Piper Jaffray analyst Gene Munster called the China launch a “disappointment.” He was expecting something in the range of 30,000 units. “We believe that eventually China will emerge as a major market for iPhone sales but it could take a year or two to gain meaningful unit traction as it did in the U.S.,” he wrote in a research note Tuesday.

The iPhone is Apple’s biggest growth story, with more than 30 million units sold worldwide since its launch in 2007. China represents a huge market opportunity for Apple, which is starting with about 1,000 places selling the iPhone.

In August, China Unicom signed a three-year non-exclusive deal to sell the iPhone in China, aiming to boost its launch of 3G services. However, some analysts say the handset — which costs $700 to $1,000 — will eventually require more subsidies to boost sales.

IPhone sales in the U.S. are heavily subsidized by exclusive carrier AT&T, enabling consumers to get the latest generation device for as little as $199.

Verizon Wireless and Motorola have unveiled what could be their best shot yet in the battle against Apple Inc’s iPhone — the long expected Droid. Motorola says Droid is the most technically advanced smartphone out there. Its promises:

• A speedy Cortex A8 ARM Processor and a Texas Instruments OMAP application chip that it says makes the device run 30 percent to 50 percent faster than other smartphones, including iPhone.
• First dibs on Android 2.0, the newest version of Google’s mobile software.
• A new free navigation service to battle dedicated GPS makers like Garmin and TomTom.
• A higher resolution screen that’s better than iPhone

“Once they see the display I think they’ll be hooked,” Motorola Chief Executive Sanjay Jha told Reuters.

Verizon’s Chief Marketing Officer John Stratton promised to spend more money advertising this device than any phone in its history. He said that it could be seen as a ”big risk” for Verizon,  which started working with Motorola a year ago, to bet on a handset maker that had been steadily losing ground.  But he said his company liked working Motorola so much that it plans to sell more Motorola Android phones in 2010.

“It almost looks like there’s a whole Droid army lining up,” said Michael Gartenberg, an analyst at research firm Interpret. Gartenberg likes the phone’s design, but reserves criticism for how it syncs consumers’ music. Not easily, apparently.

Verizon and Motorola showed off the highlights of the device today.

Tongues are still wagging about Apple’s blowout quarter, which saw the company brush past Wall Street forecasts, sending its shares north of $200. But as Wall Street waited breathlessly for the latest iPhone numbers, it was the company’s Mac line that stole the headlines, posting blockbuster 17 percent unit growth.

So what was the deal with the iPhone? Unit shipments rose 7 percent to 7.4 million units, far from chopped liver but just below the consensus estimate. What? Apple missed? Well it wasn’t quite that simple. Seems the company simply couldn’t keep up with all the folks clamoring to get their hands on the latest model, the 3G S.

Apple COO TIm Cook called it “a nice problem to have in the scheme of things,” and called 3G S demand “phenomenal.” He said demand simply outstripped supply in most of the countries where it was selling the device.

“We did improve supply markedly in September, and supply and demand converged in the vast majority of countries, either in September or in early October…we now have about 2.4 million units in the channel and that’s an additional 585,000 from the previous quarter end.”

When asked whether he was comfortable with that level, given the upcoming China launch, Cook said “I would have liked to have had more, honestly, because we were still short in some countries at quarter end.”

Cook was also asked about the wave of new smartphones that are coming onto the market. A new Android device from Verizon and Motorola has recently been taking shots at Apple in new ads.

“Frankly, I think that people are really just trying to catch up with the first iPhone that was announced two years ago, and we’ve long since moved beyond that,” Cook replied.

So what happens when the Apple suggests your handheld game device is sub-par? Out of touch? Passe? ‘Dems fighting words, right?

That’s what I asked Sony’s PlayStation boss Jack Tretton during a recent interview. His response? Keep talking, Apple — you’re only creating more future PlayStation users.

A little background: Earlier this month, Apple’s Phil Schiller said this about Sony’s PlayStations Portable (PSP) and the Nintendo DS, which have together sold more than 150 million units around the globe:

When these things came out they seemed so cool. But once you play a game on the iPod touch, they don’t really stack up anymore. They don’t have this amazing multi-touch user interface. The game are kind of expensive. they don’t even have anything like the Apps Store to find great games and titles. And they certainly don’t deliver a media experience like the iPod that is built into the iPod touch.

But worst is the buying experience. Having to go to the store and trying to find a hot new title is not a lot of fun.

Not long after, Apple CEO Steve Jobs piled on to the New York Times, saying that the new lower price for the iPod Touch would draw in gamers.

Tretton, whose full title is CEO of Sony Computer Entertainment of America, counterpunched:

The gaming heritage and the home of gaming is PlayStation. Dabbling in gaming is nice and ‘thank you’ for getting people interested in gaming — because they are going to end up with us.

Its sort of like saying, I got my drivers license and my first car was a beat up Subaru, but if you are ultimately going to be on the track, you are going to be driving a race car, and not something that’s basic transportation. So if you are going to be seriously interested in gaming you are going to end up a PlayStation consumer.

Tough talk between two consumer electronics giants.

Personally, I have played games on all three devices — but not the same games — so I can’t testify to an apples-to-apples comparison. But I’ll say this: Poker and Tetris on the iPod Touch? Fun. Super Mario Bros on the DS? Cool. FIFA Soccer on the PSP? Wicked.

(Photo: Sony’s Jack Tretten at E3; Reuters)

We caught up with Netflix CEO Reed Hastings at the movie rental company’s event where it awarded a $1 million prize after a contest aimed at improving the accuracy of movie recommendations. He spoke about his hopes of working with Apple on the iPhone, the possibility that YouTube will beef up its movie service, and the future of the DVD.

Reuters: What will Netflix subscribers gain from the improvements in the recommendation system?

Hastings: It’s doubling the quality of our movie recommendation and that helps our subscribers get more enjoyment from movies. Because more often they love the movie they watch. More often the movies recommended will will turn out to be movies that you love. If you watch a couple of movies and don’t like many, you start to watch (sports and other programming). If every movie is incredible, you start to watch more.

Reuters: Netflix video streams on Microsoft’s Xbox Live system. What about the PS3 and Wii?
Hastings: Eventually we want to be on all the game consoles, all the Blu-ray players, all the Internet TVs. So we are working in parallel with all of those efforts. Currently our Xbox deal is exclusive and we haven’t characterized it more than that.

Reuters: Any plans to work in partnership with Apple and the iPhone?
Hastings: it’s something that’s likely to come over time. But nothing in the short term. (With) movie watching, we are not focused on mobile yet, but (instead) on the TV, on Blu-ray and on the video game consoles. We will get to mobile eventually, including the iPhone.

Reuters: What of Youtube’s potential movie service?
Hastings: I think there will be a lot of competition in this market: Hulu, Apple, Amazon, Youtube, Blockbuster. Internet video is a huge opportunity. And there will be a lot of people engaged, and that is going to be great for the consumer. All of us are going to innovate and compete with each other and provide more and more value to the consumer.

Reuters: How far along are we on the transition to all digital video watching?
Hastings: There will be people doing DVD-by-mail in 15 or 20 years, so I think DVD will last a long time. Our best guess is that DVD will peak for us in 5 or so years. But it is continuing to grow. And the streaming is exploding. So we are getting nice growth in the DVD side and huge growth on the streaming side.

Reuters: What do you make of Blockbuster’s store closing plan?
Hastings: Blockbuster and Redbox really compete on  doing the inexpensive new releases, and we are much more the streaming and the catalog. Their closings don’t really benefit us. It will benefit Redbox more than it does us.

Reuters: Have you been approached about an acquisition or partnership?
Hastings: We don’t comment and any acquisition prospects.

(Photo: Reuters archive)

Check out Motorola’s new phone, the Cliq. Reuters reporter Sinead Carew scored a demo after Motorola debuted the phone in San Francisco.

Motorola launched its Hail Mary pass in the smartphone market and it goes by the name of Cliq, or Dext, depending on where you live. One would assume plenty of branding research went into the names (Cliq in the U.S. and Dext elsewhere), as this is the company that created such easy-to-remember names as Razr, Rokr and Rizr.

Motorola, once a cellphone leader producing iconic products, has fallen well behind the competition as the smartphone market continues to sizzle and consumers flock to devices like the iPhone (which, incidentally, goes by the name “iPhone” everywhere it sells).

With so many new smartphones coming to the market, analysts say the key to success is differentiation — which is often a software issue rather than a hardware one. Motorola hopes its MOTOBLUR software, based on Google’s Android platform, will help it carve out a niche.

The company calls the Cliq/Dext “the first phone with social skills.” It says MOTOBLUR integrates contacts, emails, texts, postings, photos and the like from sources like Facebook, Twitter and Gmail and makes them easier to manage.

Motorola has put all its eggs in Android’s basket, reorganizing its handset unit around the platform, but it faces quite a challenge. Many of its rivals have already integrated social-networking function into their phones.

“Not only do you have to design and build interesting phones and get them into carriers, but also can you make money on it?” said Macquarie Research analyst Phil Cusick. “The smartphone landscape is exploding and there is tons of opportunity here for somebody who can build a great device, but you also have a ton of competition. Not only the traditional smartphone guys like Apple, Palm, and HTC, but LG and Samsung - who are phenomenal executors - getting into the smartphone space as well with Android.”

Electronic Arts is launching its most venerable video game franchise, “Madden Football,” onto the hottest new gaming platform going, Apple’s iPhone and iPod touch.

The game, whose origins date back 20 years, has been a cash cow for EA over the years, and the company is now seeking to extend that popularity into the fast-growing smartphone market. EA showed a demo of the game at Apple’s media event on Wednesday.

“We’re really happy with the quality of the game, making it fun and easy to pick up and play and we think we’ve created the most authentic and realistic football experience in the market today,” said Adam Sussman, vice president of worldwide publishing for EA Mobile.

“We were even able to get Brett Favre on the Vikings,” he added, showing that the video game giant is still nimble enough to stay current on the future Hall of Fame quarterback’s latest address.

Sussman said winnowing “Madden’s” considerable complexity and richness into a compelling smartphone game was something of a challenge. The game features 32 teams, 2,000 players and 300 different plays and has been under development for around 10 months. It utilizes the iPhone’s touchscreeen controls as well as its accelerometer (for example, you shake the device to run the hurry-up offense).

Additional goodies such as roster updates will be made available via in-app purchasing in a later update.

The game is launching Wednesday in the App Store at a special price of $7.99, before bumping up to $9.99 Thursday evening. EA says it is market share leader on the iPhone, as measured by revenue, with an average price of more than $4 for its games. It expects to launch 40 iPhone games this fiscal year.

Reuters will have live updates and photos from Apple's live event at 1 pm ET on Wednesday.

Apple Inc's Phil Schiller, Senior Vice-President of worldwide marketing, speaks about the iPod touch's game playing capabilities.  REUTERS/Robert Galbraith

All photos by Robert Galbraith.