Google’s Android operating system already powers millions of smartphones made by Samsung, HTC and other competitors across the world. But following a push to build more of its own gadgets, Google closed a deal to buy the struggling smartphone maker Motorola in 2012 and is betting that it can snatch a bigger piece of the market.
Standing out in the crowded mobile market is crucial for Google, which must prove that its $12.5 billion acquisition of Motorola was worth the investment, analysts said. In the United States, Motorola phone sales trail those of Apple and Samsung, and the company will have to work hard to regain its reputation as a top smartphone brand, said Stephen Baker, a mobile analyst for the NPD Group.
Motorola, Baker said, has chosen its moment well. While Apple and Samsung still dominate the U.S. market, accounting for about 70 percent of all smartphones, Baker said that both companies have seen sales plateau in recent months as the demand for top-of-the-line smartphones hits a saturation point. That lull, he said, leaves Motorola a key opening to pick up market share.
“The benefit of being pretty far behind the leaders is they have a lot less to lose and can take chances,” Baker said.
Google is one of a handful of tech companies moving some production to the United States — after spending years shifting those jobs overseas. Although many of the components for the phone will still be made in overseas facilities, Motorola said that assembling the phones locally is integral to its ability to offer more personalized devices.
But offering consumers the ability to make a personal statement with their smartphones could give Motorola an edge in an increasingly competitive smartphone market, said Jefferson Wang, a partner at IBB Consulting, because it makes the Moto X a conversation piece.
Having U.S.-made phones, analysts said, could be a strong selling point for Motorola, though it’s not clear how much assembling the phone in the United States will benefit the average consumer in the long run.
“It’s a good thing for the U.S., but in terms of it adding some kind of incremental value to the customer, I struggle to figure out what that would be,” Baker said.
The Moto X, the firm said, will go on sale in late August or early September. AT&T will be the first to carry the phone, followed by Verizon, T-Mobile, Sprint and U.S. Cellular, for a starting price of $199.99.