With the Moto G, Google is executing Nokia's strategy better than even Nokia themselves
Google is a dangerous company. Most companies specialize in one thing, make money doing that one thing, and then invest a certain percentage of that money being made into expanding the business. Google, on the other hand, specializes in advertising, and all the money that they make from those little blue links for cheap Canadian prescription drugs is used to provide an inordinate number of services to consumers for nothing.
Enter the Moto G that was announced yesterday at a press event in São Paulo, Brazil. Google took control over Motorola Mobility about a year and a half ago, and they’re already applying the Google mentality to the once giant American mobile phone maker. Because Google prints money thanks to their ad business, they can sell an incredibly capable smartphone for just $179 unsubsidized.
How capable is capable? The Samsung Galaxy S III, launched in early 2012, had a 720p display, quad core processor, and an 8 megapixel camera. It also sold for over $600, though in the US and UK that cost was obfuscated with a two year contract. The Moto G has the same 720p display, albeit smaller and using LCD technology, the same quad core processor, though it’s four ARM Cortex A7 cores instead of four ARM Cortex A9 cores, and a 5 megapixel shooter.
Again, all that for $179. You can buy three Moto G phones for the price of an iPhone 5s and still have over $100 leftover to go out with your mates to the pub or take the misses out for dinner and a movie.
What does any of this have to do with Nokia?
Nokia was the first mobile phone maker to introduce the phrase “the next billion” into the mobile industry’s lexicon. Their thinking was that there’s a huge market out there of people who would love an iPhone 5s or Galaxy S4, but can’t afford one, so “cheap” smartphones like the $150 Nokia Lumia 520 were created.
Those cheap Lumias have been selling, that’s a fact. Nokia’s Q3 2013 financial results say the Finnish firm sold 8.8 million Windows Phones at an average selling price of $190, which is down from the $210 average selling price during the same quarter a year prior. In other words, Nokia knows that the future is cheap handsets, hence the creation of Lumia 520 and the Asha portfolio of feature phones that do more than your typical feature phone, but not enough that you can actually call them smartphones.
With the Moto G, Google says they’re targeting the 500 million people who are going to spend roughly $200 or less on a smartphone during the next 12 months. That’s not exactly “the next billion”, but it’s still a sizable market. On stage, Google called out the elephants in the room, Apple and Samsung, for their strategies of capturing the low-to-mid range segment. Samsung’s Galaxy Fame was mentioned, and mocked, for delivering inferior specifications. And Apple’s iPhone 4 was name checked as being too “old”, leaving consumers with only $200 to spend feeling like they’re relegated to the past.
How should operators feel about the Moto G? If I were in charge of a wireless network, I’d be thrilled. Earlier this year, Open Signal did some research on the relation between the size of a phone’s screen and how much data a person consumes. Their conclusion was that nearly 300 MB of data was consumed for every extra square inch of real estate. Offer your customers a phone with a larger display that’s packed to the gills with what are arguably the best internet services currently in existence, and sit back and watch your customers upgrade their data plans so they can watch more, read more, and chat more.
Looking out into the future, if Google can make a Galaxy S III class phone for $179 and launch it just 18 months after the Galaxy S III hit the market, just think of what we can expect from Motorola this time next year. It might seem hard to imagine now, but a large 1080p smartphone at under $200 that delivers Google’s vision of a connected device will be on store shelves all around the world.
It wasn’t that long ago when you needed to be a businessman to be able to spend several thousands of dollars on a briefcase sized appliance that let you make phone calls while out in the field. Today you can do that with a $25 Nokia phone. The same will happen to smartphones, and the fact that Google is accelerating this trend, because they frankly don’t care about profit and would rather break even, is something to be excited about.
Whether you’re a consumer, an operator, or a developer looking to sell apps, Google executing on the vision Nokia has been talking about for the better part of the last half decade is a welcome thing.
[Image Credit: TechAdvisor]
Update: For those who want to watch the Moto G press conference, it’s only 31 minutes long.
