AH Moto E Launch 1.01

How Does the $129 Moto E Fit in Motorola’a Future with Lenovo

May 13, 2014 - Written By Cory McNutt

 

I do not think there has been a mobile phone company that has changed more in the past few years than Motorola.  They went from one of the leaders in cellphones in the 80’s with their thin, clamshell, Razr device where they held 6.1-percent of the global smartphone business and were the third largest manufacturer in the world, down to 1.2-percent and a world ranking of number 15.  After their Razr clamshell, they just never seemed to keep up with the newer manufacturers nor the market – it was as if they lost their way.

Motorola never made a true flagship phone to match the competition – they always built a great quality device, but their specifications never matched the other high-end devices and their cameras…well, let’s just say that Motorola never took photography very seriously on their devices, while other manufacturers were striving to improve theirs.  They never really had the market covered with a range of phones and pricing, like Samsung…they could never attract the low-end market where there was rapid growth and they never reached the heights of the HTC One, Samsung Galaxy S or Note series, or the new LG models – so they were foundering about and losing lots of money.

Enter Google – When Google purchased Motorola in late 2011 for $12.5 billion, they were less concerned about manufacturing smartphones than they were about firming up the Android fragmentation and getting Android out to more users around the world.  Oh, and getting the Motorola patents was also a huge reason.  There was a huge shift in philosophy brought on by reducing the work force and filling key positions with individuals that had a different outlook on smartphones.  Newly appointed, Charlie Tritschler, senior vice president of product at Motorola Mobility said, “We believe that a quality mobile experience is a right, not a privilege.”  This could be Moto’s new slogan.

After the Moto X, they concentrated on lowering costs while keeping their quality.  The Moto G hit the streets and was a huge success – and is the company’s most successful smartphone to date.  However, one success can hardly revive the financials of a company that hasn’t seen a profit in more than three years.  With this weak market position one wonders what Lenovo will do to turn it around and what changes it will need to make to accomplish that task.  Jan Dawson, an analyst at Jackdaw Research said it best, “Motorola is a reflection of what Google wanted it to be and what it needed to be.  It’s not an indication of what it will be under Lenovo.”  Although Lenovo’s CEO Yang Yuanqing called Motorola a “treasure” and promised to protect and strengthen the brand – something they accomplished when they purchased the IBM ThinkPad

Right now, Motorola’s new guard is dead set on offering a low-cost, high-quality smartphone.  It was only a six month period from the Moto G release that Motorola lowered the price bar by $50 on the recent Motorola Moto E, which has a smaller 4.3-inch display, slower dual-core processor, and no front-facing camera.  It still shares the same design and feel as its higher priced siblings and even has dual-SIM capabilities in some markets, all for only $129.  One has to wonder if Lenovo will allow them to keep competing in that crowded field – look at the many China entries already in that category – or will they use Motorola for a flagship device.

Moto is confident that the products already in the “pipeline” will still come to fruition, such as the upcoming Moto 360 smartwatch and a possible successor to the Moto X.  However, Lenovo will certainly have to instill changes to make it once again profitable – such as further job cuts and possibly switching production from Fort Worth, Texas to their China based facilities.  They did say that they will keep the new Chicago headquarters building, but beyond that, not much was laid out.  Lenovo is already has its own philosophy in the low-end market and ranks only second behind Samsung in China – how will this line up with Motorola’s current vision.  One of the reasons Lenovo was interested in Motorola was their strategy of driving down phone costs and Rick Osterloh, President and COO of Motorola said, Lenovo is “committed to helping us deliver the products we’re working on now.” When asked about after that, he said they would look at other opportunities at that time…spoken like a true team player.

Please let us know on our Google+ Page what direction you see Moto taking now that Lenovo is the new owner – are you excited about the possibilities or worried that Motorola will lose its identity…as always, we would love to hear what you think.