What will Motorola's Moto X phone herald for Android?

Phil Goldstein

Ever since we found out about a month ago that Google's (NASDAQ:GOOG) Motorola Mobility unit is building a new Android smartphone called the Moto X (and a handful of others), I've been pondering what Motorola's new strategy will mean for the broader Android ecosystem.

The phones likely won't catapult Motorola back into the handset powerhouse it once was, but I do think the Moto X and its sister devices will help Google promulgate its mission through Android, which is primarily to give more people access to the Internet so that Google can sell its services and advertising to them. By getting more Android devices into the market that are inspired purely by the Google ethos, Google can, through Motorola, have more "information nodes" (read: phones) in the market that are aligned with its core mission of collecting the world's information and making use of it.

What do we know about the Moto X and Motorola's other coming Android devices? Not much, but one thing we do know is that they will run the stock, unskinned version of Android. Jim Wicks, Motorola's design chief, told PC Magazine that back in April. So does that mean more Android devices will follow that route? Google said at its I/O developer conference that it would offer a Samsung Electronics Galaxy S4 with stock Android, and HTC followed suit shortly thereafter with a stock version of its One smartphone. And there is clearly a market for Nexus-style devices among developers, purists and enthusiasts, noted Reticle Research analyst Ross Rubin. 

However, most companies (outside of Motorola) are not resting on the virtues of Android alone. "Companies like HTC and Samsung, when they introduced their most recent flagships, there was an inordinate amount of attention on the software and the customization," Rubin said. Other analysts I spoke with said they do not think the stock versions of the S4 and the One represent the beginnings of a major shift toward stock Android--instead, they said the phones are more of an olive branch to Google from HTC and Samsung.

One area where Motorola could have a bigger impact is on the price of smartphones. Motorola CEO Dennis Woodside noted at the AllThingsD D11 conference at the end of May that Apple (NASDAQ:AAPL) and Samsung can make 50 percent profit margins on their most expensive phones because they sell them to carriers for $650. Motorola, he said, is freed from that constraint by virtue of being a unit in Google.  

"One of the areas that we think is really open for Motorola is building high-quality, low-cost devices," he said. "The price of a feature phone now is about $30 on a global basis. The price of a smartphone is $650. That's not gonna persist. So there is a huge market."

Lower priced phones could translate into higher sales volumes--depending on how well crafted the phones are--which, in turn, could fuel Android's market share. Further, Woodside mentioned that the Moto X will be broadly distributed--and indeed, there are indications that at least four or five U.S. carriers will carry variants of the phone.

Woodside also spoke about how the Moto X (and presumably the company's other new phones) will have new kinds of sensors, so that the phone will, for example, be able to detect when it's taken out of a pocket. Or the phone will be able to detect when it is traveling in a vehicle going more than 60 mph, and will switch into "car mode" automatically.

IDC analyst John Jackson said Woodside is not "a hardware guy," so Motorola will likely focus on services instead. All of those sensors can "inform Google's megalomaniacal data empire. Google lives off of contextual metadata." Thus, Google can potentially "squeeze more user-centric data out of these phones that [Google] can use to inform [its] core assets."

Recon Analytics analyst (and FierceWireless contributor) Roger Entner said a lot will depend on how well designed the phones themselves are, but a focus on sensors could make Google services better. "If they put enough sensors for temperature and air pressure and then crowd source that data, they can have way better weather information than everybody else," he said. "It will be another way of collecting humanity's data and providing useful services."  

In an age of Edward Snowden's leaks about the National Security Agency's surveillance programs, some people may feel more skittish about Google's use of their data. However, Motorola will likely further Google's vision of an even more connected world with its new phones. Is that worth the $12.5 billion price tag Google paid for Motorola? Maybe not, but getting an Android handset maker to execute its vision for the mobile Internet isn't a bad prize for Google.--Phil

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