Try a quick experiment next time you’re sitting in a city cafe: look for the coolest person in the room and check out which mobile handset they’re using – don’t be surprised when you find its a Motorola RAZR.

Flash back just a couple of years and the only people carrying Motorola’s out of choice would have been business travellers or those who couldn’t get anything better from their operator. I suspect a few readers of this article will have an old Timeport stuffed away in a cupboard somewhere – try taking it out sometime and reminding yourself of arguably one of the worst interfaces ever to see the light of day on a mobile phone.

So how did Motorola become funky again? Whatever it’s doing, it seems to be working – this week Motorola reported record Q2 shipments (33.9m), an annual market share gain of 3.3 percentage points (now at 18.% according to Moto estimates) and sales growth of 24 percent in the mobile devices segment.

Motorola’s transformation has taken some time. There were signs of change afoot about 3 years ago, when Motorola launched handsets with a ‘fashion show’ style press event at its design centre in Milan. It took a while for this shift in thinking to filter through to all of its product lines – indeed, Motorola still produces a few very ugly handsets today – but slowly and through the focus on a handful of iconic products, Motorola has changed its brand perception.

The RAZR has been the crowing achievement of this and it was great to hear Ed Zander, Motorola’s CEO, announcing to 3GSM this year that he was planning a whole line-up of devices in this vein. It can be a brave decision to define part of your overall company strategy using the DNA of a single iconic product, but it is something which can work (look at Apple) and make the whole company stronger in the long-term.

The primary attraction of RAZR is its industrial design. Personally, I’m still not a big fan of the software interface, but if anything it is a testament to the almost unreasonable ‘desireability’ of the product that it has succeeded to such an extent even with an unexecptional interface. Motorola also now appears to be making progress in this area, developing a new interface style as part of its investment in Linux-based handsets.

The products themselves are not the only thing Motorola has changed. It has also transformed its marketing. The ‘Hello Moto’ campaign and its association with films and music has helped introduce younger customers to the brand. In fact, the phrase ‘Hello Moto’ has entered popular vocabulary, simply because it sounded cool when you said it.

Motorola is also capitalising on the convergence of music capabilities into handsets. It has been the headline sponsor of the Miami Music Festival for the last few years and made a point of launching music-focused products at the event. It has also struck a deal with MTV on co-marketing and integrating MTV content into devices. Last, but certainly not least, there is the deal with Apple. The ‘iTunes phone’ is one of the most eagerly awaited releases of the year and rightly so… Apple and Motorola are both perceived as two of the hottest design houses around at the moment – together, they make an exciting team.

It is always going to be difficult to quantify just how big an impact the improvements in its product design have had on the bottom line, but there is obviously a direct correlation between the 7 successive quarters of profitability it has enjoyed and the period in which its handset designs have improved most. In addition to the financial benefits, Motorola has also distanced itself from it’s closest competitor – Samsung – both in terms of design and profitability. Far from looking over its shoulder at its South Korean rival, it can now focus its sights on the Finnish market leader.