Motorola embraces direct-to-consumer model with new Moto G, Moto X phones

Lenovo's Motorola Mobility brand introduced a trio of new smartphones, including two intended for the U.S. market, and the company is embracing the direct-to-consumer route. Motorola is hoping its brand cachet and lower prices compared to flagship phones from Apple (NASDAQ: AAPL) and Samsung Electronics will give it a leg up over other OEMs that are also selling phones directly to consumers.

As CNET points out, other companies, including Alcatel One Touch, Huawei and ZTE, have increasingly used online sales and bypassed carriers to get their phones into U.S. consumers' hands, as part of efforts to enhance their brand recognition and sales. Motorola, with its long heritage and history in the U.S., thinks it can beat those companies at their own game.

"The strength of the Motorola brand remains strong," Jeff Miller, head of sales for Motorola, told CNET. "That's something we intend to leverage."

It's a tough sell since most U.S. consumers still buy their smartphones via carrier stores or from carriers online. However, Motorola thinks its new phones will be worth buying directly from the source.

The first new phone is an updated version of the Moto G, which has become one of Motorola's best sellers as an entry-level device. The phone sports a 5-inch touchscreen, many of the software features first found on the higher-end Moto X, as well as an updated processor, camera and with support for LTE networks. As Re/code notes, Motorola is also bringing its "Moto Maker" customization features to the Moto G to let customers personalize the look and feel of their phones and is making the device water resistant.

"That was a lot of engineering but we thought it was really important to users," Motorola operating chief Rick Osterloh told Re/code. In the U.S. the new Moto G will work with the networks of AT&T Mobility (NYSE: T) and T-Mobile US (NYSE:TMUS) but not Verizon Wireless (NYSE: VZ) or Sprint (NYSE: S). The phone is available online now and starting Aug. 2 at Best Buy stores.

In the U.S., the company will sell the Moto X Style as Moto X Pure Edition. The gadget is an unlocked phone with a 5.7-inch screen and 21-megapixel camera and can work on any of the four Tier 1 carriers as long as customers swap out SIM cards. "Plus, buying directly from Motorola means you get a cleaner version of Android, without clutter and bloatware," Motorola said. Osterloh told Re/code that phone should retail for around two-thirds the cost of a typical flagship phone, so it likely will be around $400 when it goes on sale in September. Motorola is also going to sell the Moto X Play starting in August across Europe, Latin America and Canada; that should sell for roughly half of a flagship phone, or around $300.

Motorola has posted 118 percent year-over-year growth thanks in large part to the Moto G, Osteroloh told Re/code, noting that the trend toward cheaper phones that still have powerful specs is continuing. "Prices are really coming down and there is absolutely more competition across the board," he said.

For more:
- see this Motorola blog post
- see this Re/code article
- see this CNET article
- see this The Verge article

Related articles:
Lenovo's mobile chief steps down amid slowdown in Chinese smartphone market
Amid slowdown in China, Lenovo notches 18.7M global smartphone shipments in Q1
Motorola's Osterloh calls Apple's prices 'outrageous' in response to criticism from Ive
Lenovo's Motorola sells record 10M smartphones in Q4
Motorola to return to China with Moto X, G and X Pro

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