Don't expect Motorola ( MOT) to follow Palm's ( PALM) success.

Excitement has been building as the former flip-phone star attempts to reinvent itself as a smartphone challenger. Former Qualcomm ( QCOM) executive Sanjay Jha has slashed 7,500 staff positions, targeted $1.3 billion in cost cuts from its phone unit and aligned its hardware strategy with Google's ( GOOG) Android phone software.

Motorola says it will have the Android phones ready and available in the fourth quarter. It looks like Motorola plans to debut two new Android devices -- one version headed to Verizon ( VZ) and probably Sprint ( S), and another that probably will land with T-Mobile and some European telcos.
Apple's Newest Iphone 3GS

The problem, however, is that the crowded smartphone market leaves very little room for another up-from-the-ashes recovery story.

The Verizon phone has been described as having a sleek industrial design akin to that of the edgy Razr, with a big touchscreen and wide slide-out Qwerty keyboard. But the cool Motorola touches might not be enough to set the phone apart from the pack of similar formats coming from Nokia ( NOK), Samsung, LG, HTC and possibly Research In Motion ( RIMM).

The big differentiator in smartphones is smartness.

Apple's ( AAPL) iPhone OS has won millions of fans who like its capable, stable performance. But Palm's Pre phone, designed by a former Apple engineer, aims at the iPhone's big weakness: the inability to run more than one program at a time. Nokia's and RIM's operating systems have been the keys to their success.

For its part, Android has been a surprising hit for Google as it made a risky gamble on wireless. The G1 phone at T-Mobile has done well, selling more than 1 million phones with its appealing user-friendly simplicity that's almost custom-made for Facebookers and the messaging masses.

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