Moto G settles Google's strategy

With the launch of Moto G, a fully functional smartphone priced at $179 (€132) unsubsidized, Google is finally doing something disruptive with its decision to become a hardware player.
Targeting its new device firmly at high growth markets like Brazil, it is aggressively doing what Apple fumbled with the iPhone 5C – producing a handset that is attractive and affordable enough to drive uptake of the mobile web in emerging economies, but which still leaves room for consumers to move up to higher end models in future.
Google becomes a proper device vendor at last
This shows Google finally getting to grips with its hardware/software strategy. We still believe that to be a mistake. The search giant was manoeuvered into acquiring Motorola Mobility because it was desperate for patents and the handset maker's CEO, Sanjay Jha, was too clever to wreck his firm by allowing the IPR to go alone.
Rather than selling on the device business, Google saw a chance to emulate Apple with an integrated offering for Android, in the process setting up all kinds of conflicts of interest with its handset partners – some, notably Samsung, far more powerful than Motorola – and with its own business models, relying as they do on a ubiquitous presence for Google web services.
Those conflicts have been swept under the carpet rather than resolved – until now. Google has appeared to be placating Android OEMs by excluding Motorola from its other device initiative, Nexus, and it has come across as though embarrassed by its new child, downplaying previous Motorola launches under its wing and insisting the unit is entirely autonomous. The overall impression has been unconvincing – the first thing Google did on acquiring Motorola Mobility was to install one of its own long-time executives as CEO – and apologetic.
Now it seems that Google has accepted that, if it wants to drive its own Android experience and revenues by selling its own hardware, it cannot have it both ways. Yes, Nexus will continue as a program to work with partners and tap into their innovations and brands, but that has always been a rather experimental initiative, showcasing the latest Android developments to developers and power users, and testing new approaches – like, notoriously, the direct-to-consumer sales model of the first Nexus handsets – without too much risk.
The Moto G is different. It is a full-blown bid for market share in the highest growth segment of the smartphone market, the featurephone upgraders in emerging economies – the heartland for Samsung, the Chinese vendors, Microsoft's soon-to-be acquired Asha line, and supposedly the iPhone 5C. The pricing of the last of these will sideline it, but the others are all strong contenders and many are in the Android camp. Google has a lot of work to do to minimize the impact of that conflict of interest, but at least it has a strong hardware offering now. After all, if it really wants to take the risks of moving into devices, it needs to be brave about it.
Just as Nokia has launched several flagship devices in India rather than the US or Europe, Motorola Mobility CEO Dennis Woodside came to Sao Paulo, Brazil, to unveil the Moto G. "We talked to consumers worldwide and found that the most important thing when it comes to buying a phone in Brazil is that it has a price that people can afford," Woodside told the media. Hardly a revelation, but at least Google has followed through with the pricing of the G – from $179 in the US, R$649 ($278) in Brazil.
Woodside enlarged on the theme that Apple seems signally to have missed - “Most people in the world can't afford a $500 or $600 smartphone: in fact, the average price of a smartphone is close to $200. The problem is, the experience that smartphones in this class provides is really, really bad.”
Moto G—a credible bid for the next billion
The G is a cut-down version of the new Moto X, which is in the same price bracket as high end rivals such as Galaxy S4 and iPhone 5s – and is reported to be struggling to make much impact in its early weeks on sale. That is unsurprising. Growth in the high end smartphone segment is slowing with increased saturation, and the dominance of the big two brands has never been seriously threatened before by Motorola. Google's ownership has not brought changes in design or marketing that are significant enough to change that balance, even though the X has some strong features.
However, in the midmarket there is still room for a handset that offers the lure of a big brand, with a fully integrated user experience and clear differentiation from the herd of mediocre Android offerings out there.
When launching KitKat recently, Google SVP Sundar Pichai said: “For 2014, our goal is: How do we reach the next billion people?” Android, he said, is seeing three times higher growth in Russia, Brazil and China than in developed markets, but the majority of handsets shipping in those countries still run three-year-old Android Gingerbread. So Google has made KitKat work with as little as 512MB of memory, stripping down the OS and its own apps and providing developer tools optimized for low-footprint software.
Like Samsung, Google is aiming for a family brand identify and experience spanning many price levels, while retaining sufficient premium features for the top models to justify their higher tags. So the Moto G looks very similar to the Moto X, with an edge-to-edge display, curved back, waterproof nano-coating and Corning Gorilla Glass.
The screen has the same 720p resolution but is smaller, at 4.5-inches, and the handset comes with middle-of-the-road 5-megapixel and 1.3-mp cameras plus Bluetooth 4.0 and Wi-Fi 802.11 b/g/n. The processor is a midrange 1.2GHz Qualcomm Snapdragon 400 and there is 1Gbyte of RAM and “all-day battery life”, with HSPA+ rather than LTE.
The handset actually ships with Android Jelly Bean but will be upgradeable to KitKat in January. There is dual-SIM support for some regions – an important feature in markets like India – and an FM radio as standard.
Reflecting the importance of cloud storage to users with less on-phone resource, G users get more free Google Drive capacity than X customers, a total of 65Gbytes. The handset is already shipping Brazil and parts of Europe and will come to the US, India and the Middle East in January, with other markets to follow – a target of 30 countries and 60 operators.