Smartphones: Why Moto X Matters

1 - Copy

BALASUBRAMANI MARIAPPAN

When it comes to selling a new smartphone these days, it seems two things matter more than anything else: Having a solid product, then spending hundreds of millions of dollars on marketing.

That’s the backdrop for last week’s launch of the Moto X, which I covered for CNBC. Made by Google subsidiary Motorola, Moto X is destined to be either the start of an important industry shakeup, or the search giant’s most high-profile failure … ever.

As of today, I think we might actually get the shakeup.

Quick overview: Moto X is due in late August or early September, starting at $199 on contract. It comes with a few notable features: One, you can train it to respond to your commands and do tasks without you having to touch it – saying, for example, “OK Google Now, navigate to LinkedIn headquarters.” (In my experience it works really well unless you’ve got a chatty toddler in the car.) Another? Shoppers can design color combinations for the phone, thanks to a first-of-its-kind factory in Texas, and get their custom phone delivered within a week. [See my interview with Moto CEO Dennis Woodside here: http://www.cnbc.com/id/15840232/?video=3000187540&play=1]

So why do I think Moto X could bring a shakeup? On the design and performance side, a couple of days of testing have me thinking it’s likely to hold its own among the best Android phones yet. The bigger question is, will Google deliver the marketing dollars Moto X needs to succeed? Well, Apple and Samsung each spent more than $330 million on marketing in 2012, according to Kantar Media. No other smartphone challenger even got near $100 million. Meanwhile Motorola’s already a money-loser for Google, bleeding $342 million last quarter alone.

Two conversations last week convinced me Google will pony up. A Motorola marketing executive assured me they won’t spend as much as Samsung and Apple, but they’ll spend a lot. (Then, of course the marketing guy would say that.) Later, someone else in position to know slipped me a Motorola marketing number for this cycle that sounds realistic: $250 million. (The $500 million figure that’s been floating around out there for the Moto X marketing budget is just way too high.)

That leaves me inclined to believe that with the technology inside Moto X, and the deep pockets of Google, this phone has a better chance than any other at loosening the stranglehold Apple’s next iPhones and Samsung’s Galaxy line are otherwise likely to have on holiday season sales. At a time like this, when the smartphone market is maturing, a new entrant

No guarantees, of course. But I think Moto X at least has a shot. What do you think?

Photo: Bryan Bedder/Getty Images

Jon Fortt

CNBC Tech Correspondent

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s