According to News.com, 100 people or so lined up outside Verizon’s midtown Manhattan store last night prior to its midnight opening. And various reports posted to Twitter suggest there were queues at other outlets as well, though quite a bit shorter (see below; click to enlarge).

In any event, the fact that there are lines at all must be a welcome sight for Verizon (VZ), which has been looking for a strong rival to Apple’s (AAPL) iPhone, and for Motorola (MOT), which hopes Droid will revive its much-diminished post-Razr cellphone business. As one Verizon subscriber eager to trade up to Droid told me, “it’s the best smart phone not made by Apple.”

With endorsements like this, Motorola should be working a bit harder on branding the device as its own. Right now, the Droid marketing push from Verizon Wireless is so overwhelming that you’d think CEO Lowell McAdam designed it himself. Why aren’t we hearing from Motorola as well?

“Droid is potentially a game changer for Motorola,” iSuppli analyst Tina Teng said in a recent research note. “Motorola now is no longer just emphasizing slick form factors, such as it did with its RAZR handset. The company now has focused on the hottest segment of the global mobile handset market–providing compelling smartphone products that are usable and expandable through third-party applications.”

That being the case, Motorola might want to do a bit more to get its name out there.

“We expect Motorola’s 2010 performance to hinge largely on the success of Android models debuting in 4Q09. Just months ago, the expected launches were ‘Morrison’ for T‐Mobile, ‘Sawgrass’ and ‘Heron’ for AT&T, and ‘Sholes’ and possibly ‘Calgary’ for Verizon” (VZ), Kuittinen said in a note to clients. “We believe the AT&T models have been canceled, and Verizon has pushed ‘Calgary’ into 2010.”

According to Kuttinen, “The loss of AT&T’s support for 4Q09 changes the winter outlook for Motorola dramatically. It is likely that the success of the $99 iPhone, combined with the possible November launch of the $99 Palm Eos could put AT&T in a situation where its $100 smartphone range for the Christmas quarter is already full of models featuring very advanced software and display technology.”

A worrisome turn of events and one that will weigh heavy on Motorola’s financials if it proves true. Said Kuittinen: “The narrowing of Motorola’s Android plans may have a substantial impact on the winter performance of the company’s handset division precisely because Motorola needs a rapid roll‐out of a wide range of follow‐up models for its ailing RAZR, Q and Z series models.”

Both devices are said to feature a touchscreen and slide-out keyboard and a “social communications” focus. Which sounds somewhat compelling, though it would probably be more so if the market weren’t already enamored with Palm’s (PALM) Pre, Apple’s (AAPL) iPhone 3GS and its $99 brethren, the iPhone 3G. That said, I suppose there’s always a chance that Motorola (MOT), using Android, could turn out a handset that apes those devices and returns the company to the glory days of the RAZR or at least points it in the right direction.

Certainly, Motorola desperately needs something like that. A weak product portfolio has already reduced its share of the handset market to 6.5 percent, about half what it held a year ago. And with the econalypse in full swing and consumer spending declining, Motorola’s prospects in the mobile handset don’t appear very promising.

“We believe demand has deteriorated across most of the company’s core end-markets, with a particularly sharp slowdown in handsets, evidenced by a number of key supplier and competitor pre-announcements,” Sheerin wrote in a note to clients. “[The economic downturn] will make a recovery in the core handset business even more challenging and could accelerate cash burn.”

More ugly news for Motorola (MOT), which last week had its credit rating slashed to Junk by Standard & Poor’s.

The Motorola (MOT) Razr’s 12-quarter streak as the No. 1-ranked handset in the United States has finally been broken–by Apple, of all companies. According to a survey by NPD, the Razr V3 slipped to second place behind Apple’s (AAPL) iPhone 3G in the third quarter, apparently a victim of its own outdated design.

“The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality,” said Ross Rubin, director of industry analysis for NPD. “Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced Internet features.”

An interesting trend. Especially, since smartphones tend to be quite a bit pricier than their dumbphone counterparts. Indeed, AT&T (T), the iPhone’s exclusive carrier in the U.S., offers the device for $200 with a two-year contract, while it offers Motorola’s RAZR V3xx Platinum for $0.01.

Seems $200 beats free, or essentially free, even in the ugliest of economic times–as long as it’s emblazoned with an Apple logo.

News of Apple’s latest achievement comes just weeks after the company announced it had become the world’s third largest mobile phone supplier in terms of revenue.

Quite a shock for Motorola (MOT) observers, who had figured the company was prepping a $124 million second-quarter net loss, about four times larger than the one it posted a year ago. A bit of a shock too for Motorola, which itself had predicted a loss of two cents a share. In short, great news for the company, which may have just turned the tide in an ugly year-long trend of losses.

That said, Motorola still faces many challenges. Its share price is down more than 61 percent since its decline began in Oct. 2006. And its post-Razr phone business is in collapse at a time when the public is becoming increasingly fascinated with the eye-catching devices peddled by its rivals.

On Friday Motorola sued Fenger, accusing him of divulging its operating strategies, marketing initiatives and whatnot to further the success of Apple’s new iPhone mobile platform. “[Fenger] was privy to the pricing, margins, customer initiatives, allocation of resources, product development, multi-year product, business and talent planning and strategies being used by Motorola,” the mobile-phone maker alleged in its complaint. It fears he handed that information over to Apple. And presumably, that’s the reason Motorola hasn’t been making phones that people want to buy.

Anyway, in addition to damages, Motorola seeks a court order barring Fenger from working at Apple. The company also hopes to recoup more than $1 million for Fenger’s alleged violation of stock-option agreements. And, perhaps, even the market share it has ceded to rivals in the past few years.

Motorola added another dancer to its conga line of disappointing quarters today, posting an ugly first-quarter loss. The ongoing collapse of its post-Razr phone business continued to weigh heavily on the company, which lost $194 million in the quarter ended March 31. That’s significantly worse than its year-ago loss of $181 million. Sales fell about 21% to $7.45 billion, from $9.43 billion a year ago. Mobile-devices losses were $418 million on sales of $3.3 billion, down 39% from the year-earlier quarter.

Suffice to say, the gruesome performance fell short of Wall Street expectations. Motorola (MOT) shares slipped into the mud following the news. They’re trading around $9 right now, down some 4%.

Not to worry, though, says CEO Greg Brown. Motorola, which plans to shed its money-losing handset division in 2009, is well positioned for recovery. “Motorola is still a huge business and an iconic company,” he told USA Today. “I see a vibrant, very successful mobile-device business with a fresh portfolio that is aggressive and competing effectively [in the global market]. These elements, I think, will allow it to compete ferociously in the future.”

And today, many observers are describing the $100 credit as an admission by the company of a rare marketing misstep. Buried in a firestorm of hate mail from betrayed loyalists who stood in line June 29 to be the first to pay as much as $599 for the viciously hyped device and fearing that Apple had tainted its integrity, CEO Steve Jobs blinked.

Or did he?

Because let’s face it, Apple’s $100 mea culpa and the events that preceded it conjured up untold millions of dollars in publicity. The company, its products and the emotional investment some consumers have in them have been in the headlines all week. Think people would get this worked up over a Razr price cut? … And Apple isn’t exactly going to suffer from those $100 credits that probably cost it half that sum to issue and will drive consumers back into its stores. Think about the iPhone price cut that way, and the “fiasco” begins to look more like an ingeniously scripted marketing stunt.

“So why did [Jobs] do it,” asks PBS columnist Robert Cringely. “Why did he cut the price? I have no inside information here, but it seems pretty obvious to me: Apple introduced the iPhone at $599 to milk the early adopters and somewhat limit demand, then dropped the price to $399 (the REAL price) to stimulate demand now that the product is a critical success and relatively bug-free. At least 500,000 iPhones went out at the old price, which means Apple made $100 million in extra profit.

“Had nobody complained, Apple would have left it at that. But Jobs expected complaints and had an answer waiting–the $100 Apple store credit. This was no knee-jerk reaction, either. It was already there just waiting if needed. Apple keeps an undeserved $50 million and customers get $50 million back. Or do they? Some customers will never use their store credit. Those who do use it will nearly all buy something that costs more than $100. And, most importantly, those who bought their iPhones at an AT&T store will have to make what might be their first of many visits to an Apple Store. That is alone worth the $50 per customer this escapade will eventually cost Apple, taking into account unused credits and Apple Store wholesale costs.”

That was one iPhone early adopter’s crass assessment of his feelings of self-worth, after Apple unexpectedly cut the price of the device by a third–just two months after it arrived at market. At an unveiling of a new line of iPod music and video players in San Francisco yesterday, CEO Steve Jobs said Apple was dropping the price of its 8-gigabyte iPhone from $599 to $399 to drive sales of the device over the crucial holiday selling period. “The customer-satisfaction numbers for the iPhone are off the charts,” Jobs said. “The customer-sat[isfaction] numbers are higher for the iPhone than for any Apple product ever. They love it. But we want to make the iPhone even more affordable for even more people this holiday season. So we’re going to do something about that today. We’re not going to sell it for $599 anymore.”

Now price cuts for cellphones aren’t unusual. Samsung’s Blackjack and Motorola’s Razr both saw rapid price cuts following their respective debuts. But neither was launched into a market of monomanaical loyalists willing to camp out on a sidewalk overnight just to be among the first to own one–many of whom are today feeling a bit used. “Over time I have owned a 3G iPod, original Shuffle, iBook G4, iMac, new Shuffle, 4G iPod, video iPod, iPod mini and now the iPhone,” one wrote in a post to everythingiPhone. “I can see updates to the product line being made over time, but $200 in two months is a kick in the nads to EVERYONE who bought an iPhone.”

Perhaps, especially if the cut was made possible not by a sudden drop in component prices but a calculated overpricing conceived to exploit early-adopter demand. But ultimately, those who don’t think the iPhone was worth $599 when it debuted probably shouldn’t have bought it. “That’s technology,” Jobs told USA Today. “If they bought it this morning, they should go back to where they bought it and talk to them. If they bought it a month ago, well, that’s what happens in technology.”

One last point worth noting here: Early adopters probably aren’t the only folks to be taken aback by the sudden and precipitous drop in the iPhone’s price. Apple’s rivals in the handset market must be absolutely reeling. Here they were scrambling to produce iPhone-like, and iPhone-lite devices they believed would compete with a $600 phone they could easily underprice. Now, they’ve got to compete with a $399 device that is perhaps one of the best examples of Apple’s design and engineering prowess. And they’ve got to do it in time for the holiday shopping season …