UPDATED 12:00 EST / JULY 11 2013

NEWS

Moto X: A Deadly Threat To Samsung & Apple – If The Price Is Right

Motorola used to reign on the mobile scene.  It was the first company to offer a commercial cellphone.  It was hugely popular in the early 2000s when it first released its iconic Razr line, a series of slim phones that caught the attention of fashionistas and business people alike.

Unfortunately, when the dawn of touchscreen devices came, Motorola had a hard time coping.  People were no longer interested in sleek and slim devices, now they wanted nothing less than a computer in their pockets, being blinded by the allure of devices like Apple’s iPhone.

For a time it looked like the firm would die a slow and lingering death, but then Google came sauntering in to the rescue, acquiring Motorola Mobility. But ever since the acquisition, the two have yet to release a single Google-Motorola product.  They’ve made us wait a long time, but it’s beginning to look as if it could well worth it as the Moto X, Google-Motorola’s flagship device set to be released this summer, looks to have all the right stuff to break up Apple and Samsung’s mobile domination.

$500M worth of Ads

 

For any device to be successful, it’s not enough just to have all the bells and whistles – just as important, if not more so, is a world-class marketing strategy that can make people believe this is the device they want to buy.  A good marketing strategy can fool people into paying hundreds of dollar for a product that is worth $10 dollars.  Google knows the power of advertising more than most – it does after all, generate 99% of its revenue from it – and so it’s not really a surprise that it’s given Motorola a whopping $500 million war chest just to push this product flying off shelves and into the consumers’ hands.

Motorola’s first ad for the Moto X, which ran last July 3, boasted of a phone that would set consumers free from the constraints of uniformity.  The Moto X ad claims to be the first truly customizable phone, though it hasn’t been confirmed as to what aspects of it can actually be ‘customized’. However, leaks have surfaced that consmers will be free to choose the color of the front and back covers and add some engravings if they wish to, to make the device more personalized.

As for the price, the Moto X is expected to be in the prices range of top smartphones these days: $199 with a two-year contract, and about $599 without a contract.

How Moto X Can Dominate

The Moto X is expected to launch with all four major carriers; AT&T, Verizon, Sprint and T-Mobile, this Summer, but that’s not the best part.  According to sources, Google has managed to convince these carrier to minimize the pre-installed apps or “bloatware” which means more space on the device for consumers.  Consumers would finally be rid of all those annoying apps that carriers force onto their phones, a huge selling point in its own right.

It’s a little unclear what kind of market position Google’s going to take with the Moto X. The Wall Street Journal expects it to be a high-end device at the same price point as the Samsung Galaxy S4 and the iPhone 5, costing around $200 on contract and $600 for pay as you go. However The Verge says differently, predicting a non-contract starting price of just $199. For us that seems the more likely number – it might seem hard to swallow at first, but Google is well known for basically giving its products away for free, because hardware barely even figures in its total revenues. Unlike Samsung and Apple, it can easily afford to do this, and it’s something drastic like this that’ll force consumers to sit up and take notice.

Moreover, not only is it likely to be cheaper but the Moto X will also be available online, together with all the customization options available in retail stores.

Skepticism on Moto X

 

Not everyone is convinced Samsung and Apple have anything to worry about. Rajeev Chand, a managing director at boutique investment bank Rutberg & Co., acknowledged that the industry is looking for a hero phone – something that can take the spotlight and money away from Apple and Samsung – but doubts that it’ll be the Moto X.

Chand says that he’s skeptical as to whether the Moto X can differentiate itself enough from current smartphones available, and points out that so far it hasn’t announced any concrete strategy.

“No one has a formula for success to rival Samsung at this point.”

Unless of course, that formula involves basically giving your phones away for free :)

Contributers: Mellisa Tolentino

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