Google and Motorola are reportedly teaming up to develop a new handset known as the X phone.

The smartphone will be used to compete against the iPhone 5 and will launch sometime next year.

The two companies hope to deliver something effective enough to steal some market share away from Apple.

Motorola was acquired by Google for $12.5 Billion and it started developing this device known as the X phone to stand apart from existing smartphones. However, the company has run into its fair share of issues.

The new hardware unit has run into some obstacles with manufacturing and supply-chain management that caused Motorola to rethink some of its initial plans for the X phone that included a possible flex or ceramic design.

The X phone is being made to boost the sales of Motorola devices overall and Google hopes to assist the company by pushing them towards releasing less products that have higher end specifications and provide a quality experience for the user overall.

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Motorola is currently focusing its energy in two areas. One is developing its "Droid" line of smartphones for its carrier partner Verizon. The other is the creation of the X phone which the company hopes to make a huge statement with. The company also plans to release an X tablet somewhere down the line.

Dennis Woodside, a former Google top sales executive who now works as Motorola's chief executive, spoke with The Wall Street Journal regarding the device. He stated that the company is "investing in a team and a technology that will do something quite different than the current approaches."

The project is being led by Lior Ron, former Google Product Manager.

Motorola hopes to have panorama photo capabilities available on the X phone's camera along with better color saturation.