Sources familiar with the effort told the Journal that Motorola, acquired this year by Google for $12.5 billion, is working on a device known internally as the "X phone" to stand above existing phones.
The phone is said to be a key part of Google's strategy for improving the market position of the cellphone pioneer based on quality over quantity, purposely reducing the number of Motorola products.
Motorola makes a number of devices sold by carrier partner Verizon Wireless, such as the "Droid" line of smartphones, but Google is pinning hopes for improved success for Motorola on the X phone.
Motorola is "investing in a team and a technology that will do something quite different than the current approaches," said Dennis Woodside, Motorola's chief executive who was formerly a Google sales executive.
Although Motorola has "fallen under hard times," he said, it "now has the support of a shareholder in Google that has resources to do big things."
However, Woodside declined to discuss specific products under development, the Journal said.