Moto X launch is fraught with consequences

Blogs Richard Goodwin 13:53, 31 Jul 2013

The Moto X will be a tough sell for Google, according IDC analyst Francisco Jeronimo

Google and Motorola top brass will unveil the Moto X tomorrow at an exclusive launch event in New York. Heralded as the device to put Motorola back on the map, the Moto X is also the first smartphone to be designed and built in the US.

Expectation is high, but that’s a given seeing that the Moto X is the first handset co-developed by Google and Motorola since the former acquired the latter in 2012.

Motorola CEO Dennis Woodside first confirmed the handset’s existence at AllThingsD’s D:11 conference. Notable features of the Moto X handset are its OLED display, excellent battery life, and durability, said the CEO. 

The handset will also have ‘sensory awareness,’ too, meaning it will know when it’s in a car, for example, or in an office environment. Woodside did not elaborate on how this would work, however. 

Producing a handset like the Moto X places Google in a rather tricky position, one that commentators and industry insiders have been discussing at length ever since its acquisition of Motorola was first mentioned.

Google now has a vested financial interest in how Motorola performs. It wants and needs Motorola to be profitable. In order to do this Google has to do two rather unsavoury things – cut jobs to reduce overall costs and go into direct competition with its existing hardware partners.

Back in 2011, Google Chairman Eric Schmidt told reporters that a ‘potential’ Motorola buy-out would in no way affect the openness of Android – that Google would not give Motorola preferential treatment over LG, Samsung, HTC, and ZTE.

The launch of the Motorola X changes everything. How can Google not give Motorola preferential treatment when it owns the company? 

‘Google is playing a risky game by co-promoting Moto X alongside its Nexus portfolio at the same time. Google is both partner and rival to major companies like LG and HTC. If Moto X is a success, it will inevitably upset major Android partners like Samsung and encourage them to look at other “more neutral” platforms such as Firefox,’ said Strategy Analytics’ Neil Mawston.  

‘Google is taking a risky bet that any growth in Motorola smartphones will eventually offset any slowdown among its partners like HTC. We expect the Moto X portfolio to be marketed in the US and worldwide at different price-points to the Nexus portfolio and it will be emotionally promoted at home as “made in America”,’ added Mawston.

It’s a PR nightmare, to be sure, and you can bet your bottom dollar that Google will have its best spin doctors working round the clock on how to re-sell Schmidt’s original line to its understandably nervous hardware partners.

The Moto X story so far…

Tasked with re-establishing Motorola on the global stage and earning Google some lucrative ROI, the Motorola X is about as enigmatic as a handset can be.

Recent leaks suggest the Moto X will feature a 1.7GHz Dual-core Qualcomm S4 Pro MSM8960DT chipset, 2GB of RAM, a 4.7-inch 720x1184 (potentially, Super AMOLED) display, 16GB of storage, no SD-support, and a 2200mAh battery cell.

Spec and hardware are important in today’s market, but they’re nothing without a strong brand to back them up and that, according to IDC analyst Francisco Jeronimo, is the biggest problem currently facing Google’s Moto X handset.

‘The Motorola brand is not perceived well in Western Europe. And this will make it increasingly difficult for them to compete with the likes of Samsung and HTC moving forwards – even with Google backing.’

Motorola experienced a serious PR blow back in 2011 following higher-than-expected return rates for its Motorola Atrix, something its then-CEO Sanjay Jha blamed on nefarious Android applications.

Then came the Xoom, Razr, Razr Maxx, and Razr i which, while being perfectly adequate devices, failed to impress consumers who had by then moved on to greener pastures.

‘The Motorola brand, nowadays, is not associated with quality,’ said Jeronimo. ‘Operators push Samsung, HTC, Apple, and Nokia because they’re confident in those brands – because consumers relate to those brands. I’m not sure simply having an association with Google would change this for Motorola.’

Moto X will be no Nexus 4

Contrary to KYM wordsmith Damien McFerran's hopes and dreams for the Motorola/Google relationship, it’s looking increasingly likely that the Moto X will not be a Nexus device.

Jeronimo seems convinced that Google will keep its Moto X phone and Nexus business unequivocally distinct.

So how does one go about re-branding a failed company?

The only way of circumventing such a bad reputation, according to Jeronimo, is to offer the Moto X at an extremely low price point, just as Google did with its Nexus 4.

But that’s not going to happen. Google will not want to directly undercut its hardware partners, an approach like that would prove detrimental to its relationship with Samsung, HTC, LG, Huawei, and ZTE. 

‘I expect the Moto X to be priced around the same level as top tier devices from HTC, Samsung, and LG. Offering the X phone at the same price as the Nexus 4 would infuriate Google’s existing hardware partners,’ said Jeronimo.

He added: ‘Google needs to keep its partners happy. It’s a tricky position to be in. If it grows Motorola too fast it’ll alienate its partners.’

And don’t expect to see the Moto X sold inside Google Play either. On the subject of X brand tablets, Jeronimo does not believe Google and Motorola will build a tablet together either.

The Moto X will get a release this summer, following its August 1 launch. At the time of writing it is unclear whether the handset will be coming to the UK.

Disqus - noscript

Can't help but think this is all wrong. Google has WAY too much invested in other hardware partners to cut them off. Until Motorola can outpace Samsung on every level, there's no way they are going to cut off other hardware partners. Informative analysis, but I feel it's just plain wrong.

It'll definitely be interesting to see how the Google/Motorola relationship develops. The X phone - if leaked info is taken as gospel - does sound insanely good. Before starting the article i wanted to take the angle that it could potentially be the best Android handset ever with its massive CPU and all-day battery life.

Francisco makes a good point though. Google has to be very careful with how it takes this thing to market, especially with Samsung now so dominant. Google I/O 2013 will be one hell of a show if this bad boy turns up!

Cheers for the feedback BTW.

Rich.

isn't that exactly what the article was saying?

Sorry, couldn't resist: if they're building this in the US, will it come with fries and corner badly?

I think the analyst has got it wrong...

Android hardware partners are doing great right now, and they are seen as the top-tier devices to own. When people look at the Nexus 4, or most direct Google products, they are seen as a reference design, and are generally not as popular as most people are lead to believe because the media presence of the Nexus line has been minimal.

I believe Moto X will co-exist with the existing Nexus 4 at a competitive price point, and we could see prices reduced on the current Nexus 4 very slightly. The Moto X is not as powerful as the Nexus 4, so I'm not sure how well they will pull the wool over everyone's eyes with marketing fluff to justify a significantly higher price tag. I think the Moto X will come in at $349 and the Nexus 4 will drop the 8GB version, and reduce the 16GB version to £299.

It sounds like the author Francisco Jeronimo is partial when it comes to the Google Nexus line of phones.
He begins by telling us of the dangerous game that Google has embarked on with the production of the Moto X phone, but he never directly tells the reader that Google is already in the phone production business with the existence of its Nexus line. ‘Google is playing a risky game by co-promoting Moto X alongside its Nexus portfolio at the same time. Google is both partner and rival to major companies like LG and HTC. If Moto X is a success, it will inevitably upset major Android partners like Samsung and encourage them to look at other “more neutral” platforms such as Firefox,’ said Strategy Analytics’ Neil Mawston.

Moto X will be no Nexus 4
He then proceeds to tear up Motorola's past failures at smartphone relevance. And then indicates that Google would not be willing to sell the Moto X at as low a price point as they did with the Nexus 4?
That statement makes no sense at all. Google produced and marketed the Nexus 4 phone at an extremely low price and they were not concerned about their partnerships with Samsung, HTC and LG when they did that. So why would they price the Moto X any differently if they could produce it as cheaply as they did the Nexus 4???

Francisco can obviously see the righting on the wall for the Nexus line, as its highly unlikely that Google will produce both Motorola and Nexus phones, especially in light of the investment that Google has made to make Moto X happen.
"Goodbye Nexus!"

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