One morning this summer, I was ushered into a small conference room at the Googleplex to chat with Dennis Woodside, the CEO of Google Inc.'s Motorola division, where he gave me a sneak preview of the company's flagship smartphone, the Moto X, which hadn't yet come out.

I left the meeting more puzzled than ever about Google's decision to buy the struggling device maker two years ago. When Mr. Woodside showed me the Moto X, I found it clever but unspectacular. Though the phone, which came out in September, had a few innovative...