Motorola on Thursday
unveiled a new smartphone that consumers can personalize with a choice of
colors and materials, hoping to stand out in a crowded market and justify the
$12.5 billion that Google Inc paid for the ailing handset maker.
The highly anticipated
"Moto X" marks the cellphone maker's first flagship device since
Google bought the company in 2012, and is its latest attempt to break into a
smartphone market dominated by Apple Inc and Samsung Electronics.
The phone's
customization options are a novel touch which may appeal to fashionistas,
analysts said. But some analysts questioned whether the Moto X offers the kind
of technological breakthroughs that will vault Motorola back into the top rungs
of the mobile rankings.
"We would have
expected magic from somebody like Google, and this is not magic," Roger
Entner, an analyst with Recon Analytics, said.
"Motorola could
have done this without Google equally well. Or for that matter, another
hardware manufacturer not owned by Google could have made this phone," he
said, citing the phone's average hardware specifications.
The Moto
X will go on sale in the United States at the end of August or
the beginning of September for a suggested retail price of $199.99 to customers
who sign a two-year contract at five of the biggest U.S. mobile network
operators.
(Also see: Moto X review)
Google faces a steep
climb in its effort to revive Motorola, which once claimed the No. 2 spot in
the global phone market but according to research firm Strategy Analytics now
commands a mere 2 percent market share. Shut out of the Apple-Samsung battle,
Motorola competes with other smaller players such as HTC, Nokia and BlackBerry.
Motorola is betting
that it can win over consumers by offering a huge palette of colors to
personalize their phones, as well as unusual phone materials such as wood.
(Also see: 5 new features in Motorola's Moto X)
"They're not
playing the 'mine is bigger than yours game,'" Avi Greengart, an analyst
with Current Analysis, said. "Their approach is that this is what
consumers actually need.
"I have no doubt
there are people who want to customize their phones. The question is how many
of them," Greengart added.
AT&T Inc, the No.
2 U.S. mobile service provider, will have exclusive rights to let its customers
customize the phone from a selection of 18 colors for the back, two for the
front and seven accent colors for an undisclosed time period.
While AT&T will
allow customers to customize their phones, rivals Verizon Wireless , Sprint
Corp, T-Mobile US and U.S. Cellular will only be able to offer black-and-white
versions of the device.
In order to promise
delivery of customized phones within four days, Motorola had contract
manufacturing partner Flextronics International Ltd build a factory in the
United States.
Another phone launch
The Moto X launch comes as speculation grows that Apple will unveil a less
expensive version of its iPhone later this year. There are also rumors that
Amazon.com is developing a low-cost smartphone, to follow up on the success the
e-commerce company has had with its Kindle tablets
.
Colin Gillis, an
analyst with BGC Partners, said the Moto X's is too expensive given the
market's shift to lower-priced phones. Motorola is "chasing after the high
end right when the high end is dead," he said.
The phone's price and
its lackluster features will hamper Motorola's efforts to return to
profitability, said Gillis.
"Motorola has
been in the money-losing club and clearly they want to stay there," he
said.
Since it bought
Motorola, Google has promised that it would rationalize the company's phone
range, which included as many as 45 phones in 2011. Along with the Moto X and three Motorola Droid phones, Motorola will likely
have just one more phone launch this year, said Rick Osterloh, Motorola's vice
president.
A Motorola spokesman
told Reuters that the next phone would be less expensive than the Moto X.
Analysts also noted
that the Moto X does not include the newest version of Android, the mobile
operating system software that Google gives away for free and which is featured
on three out of every four smartphones sold worldwide.
Google must walk a
fine line in its ownership of Motorola, to make sure that other phone vendors
that use its Android software - including Samsung - do not feel that Motorola
receives preferential treatment.
Motorola, which Google
runs as a separate company, does not get early access to new versions of
Android, a spokesman said, noting that the newer 4.3 version of Android was
only made available last week.
Google primarily makes
money off of Android from online advertising when consumers access its services
on Android-powered devices.
Rick Osterloh,
Motorola's vice president for product management, said consumers have shown
that they are interested in putting their personal stamp on a phone, seen in
the popularity of phone cases featuring various colors and sparkly surfaces.
Motorola is still
working out which wood to use, he said. Aside from cosmetic concerns, the
decision will have technology ramifications because different woods
"respond differently" to radio signals.
In addition to
industrial design changes such as a curved back and the choice of colors, the
phone's key features found in its camera and a voice-activated user interface
are the same as what Motorola introduced in its line-up of new Droid devices
last week.
Motorola said that
Moto X would become available in Canada and Latin America as well as the United
States around the same time.
Motorola said it has
yet to establish a price for customers who want to pay the full retail price
without signing a contract.
Shares of Google
closed up 1.9 percent at $904.22 on Nasdaq on Thursday
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