Report: Google's Motorola preps cheaper Moto G after Moto X sales disappoint

Google's (NASDAQ:GOOG) Motorola Mobile division is expected to unveil its newest smartphone, a low-cost gadget called the Moto G, on Wednesday amid concerns that its higher-end model, the Moto X, has so far failed to ignite sales, according to a Wall Street Journal report.

Motorola Moto G

Motorola's invitation for its Moto G announcement features a globe, a likely indication the phone will work across the world.

The report, citing unnamed sources familiar with the matter, said the Moto G will be formally introduced at an event in Brazil. Details of the Moto G leaked over the weekend, when a version appeared on Amazon's UK website at a price of £160, or about $255, without a contract. The site said the gadget will have a 4.5-inch HD screen, quad-core processor and will come with "advanced Android with guaranteed upgrade," likely a reference to an upgrade to Android 4.4 KitKat.

A Motorola spokeswoman declined to comment. Motorola CEO Dennis Woodside said when the Moto X launched in August that a cheaper successor to the Moto X would be coming, though he did not provide specifics. "Moto X is the brand that we are most focused on," he told CNET. "And there is more to come. You will see additional products within months."

Motorola recently cut the price of the Moto X to $99 with a two-year contract, down from $199. Motorola also made its "Moto Maker" customization studio, which lets customers change the colors and the back plates and accents of the Moto X, available to all carriers. Previously, it was only available to AT&T Mobility (NYSE:T) customers.

Verizon Wireless (NYSE:VZ), AT&T, Sprint (NYSE:S), T-Mobile US (NYSE:TMUS) and U.S. Cellular (NYSE:USM) have been selling the Moto X since it launched in August. So far, the phone does not appear to have lifted Motorola's fortunes. Motorola reported an operating loss of $248 million, or -21 percent of revenue, during the third quarter. The loss was wider than the operating loss of $192 million, or -11 percent of revenue, in the year-ago quarter.

The Moto X makes use of a variety of sensors to set itself apart. One of the key features of the phone is Touchless Control, an always-on voice recognition system that quickly learns a user's voice and only responds to them, letting them conduct searches, make phone calls, get navigation compose texts and other activities. Active Display is a feature that automatically displays important information on the screen so that users don't have to constantly wake the phone up to look at the time or see messages.

According to data from research firm Strategy Analytics cited by the Journal, Motorola sold roughly 500,000 Moto X phones in the third quarter. Strategy Analytics projects Motorola will sell 1 million units of the phone in the fourth quarter. "There was a lot of wood behind this arrow," Rutberg & Co. analyst Rajeev Chand told the Journal. "For Motorola this has got to be disappointing."

To quantify the penetration of the Moto X and other Motorola devices, Chitika Insights sampled tens of millions of U.S. and Canadian online ad impressions running through the Chitika Ad Network during the month of October. Chitika found that the Moto X made up 1.8 percent of North American Motorola smartphone Web traffic in the period. 

To put that in a bit of context, Chitika also examined the share growth of Motorola smartphone Web traffic in North America, and found that aggregating the traffic from all Motorola smartphones also shows a steady increase in the Web usage share, up to 4.1 percent of all North America smartphone web traffic at the end of October.

For more:
- see this Motorola blog post
- see this WSJ article (sub. req.)
- see this Guardian article
- see this AllThingsD article
- see this CNET article
- see this Chitika post

Related Articles:
Google's Motorola unveils Project Ara, focuses on customizing smartphone hardware
Google urges patience on Motorola, which continues to bleed cash
Rumor Mill: Moto DVX could be a cheaper version of the Moto X
Motorola execs push back on criticism of Moto X specs
Moto X is the starting point for the new Motorola, not the end
Google's Motorola unveils Moto X Android smartphone, brings it to multiple carriers

Sponsored by ADI

What if we were never truly alone? Our next-gen communications technology can help people in even the most remote places stay connected.

What if there were no ocean, desert, mountain or event that could ever keep us from telling our stories, sharing discoveries or asking for help? ADI’s next-gen communications technology could keep all of us connected.

Suggested Articles

AT&T has shifted its Cricket prepaid brand to a 100% authorized retailer model, according to Wave7 Research.

The FCC decided to extend the timeline for responding to Huawei's application for review until December 11.

All operators are trying to understand the intersection between their networks and hyperscale networks. But who gets the lion's share of the revenue?