Motorola’s new Milestone XT720 is set to become the first Google Android 2.1 phone with an 8mp, xenon-flash camera. The new handset is the follow-up to Motorola’s original Milestone, which was hugely successful in America.

With a 3.7” screen and an HDMI port, the device targets a market of photo and video fans who have historically been underserved by Android handsets. It will offer 10x digital zoom, a 720p HD camcorder and smart image capture which includes easy panorama, face detection, multi-shot (six shots in a row), face filter, red eye reduction and camera shake prevention. An 8gb memory card is also included.

Although the handset also includes Motorola’s Motonav satellite navigation, it does not run Android 2.2, the forthcoming, new version of Google’s mobile operating system that offers faster performance and runs Adobe’s Flash technology that is used on a significant number of websites.

Motorola declined to comment on whether the handset would receive the upgrade. No devices have yet been released that already run Android 2.2, although it was demonstrated at Google’s IO conference in May. The web giant has yet to announce any release dates.