Google Designing 'X Phone' to Rival Apple, Samsung

Engineers at Motorola are hard at work on a sophisticated handset—known internally as the "X phone"—but the Google Inc. unit is running into some obstacles in its effort to provide more potent competition for Apple Inc., said people familiar with the matter.

Seven months after being acquired by Google for $12.5 billion, Motorola is designing its marquee handset with cutting-edge features to stand apart from existing phones when it is released next year, these people said.

But while Google is known for swift execution on the Web, its new hardware unit has run into hurdles associated with manufacturing and supply-chain