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Motorola makes a comeback

Mikael Ricknäs | Aug. 12, 2014
The company has more than doubled its smartphone sales in the past year

Motorola Mobility has made an unexpected comeback thanks to its popular Moto G and Moto E smartphones, but increased competition and its looming acquisition by Lenovo make the future far from certain.

What a difference a year makes. Motorola sold 8.6 million smartphones in the second quarter, up from 6.5 million in the first three months of the year, and more than double what it sold in the same quarter a year earlier, according to ABI Research.

The figures pale in comparison with those of Apple and Samsung, which sold 35.2 million and 75 million phones last quarter, respectively. But Motorola is in a position few thought it would reach just a year ago.

"The resurgence has slightly surprised me, to be honest. I didn't expect to see Motorola come back in a meaningful way, but it actually has," said Nick Spencer, senior practice director at ABI Research.

Ben Wood, director of research at CCS Insight, agreed.

"If you'd asked me about Motorola a year ago, I would have said it was on a distinct trajectory towards oblivion," he said.

Motorola's turnaround can be attributed only in part to Google, which announced it would buy the handset maker three years ago this week. The deal gave Motorola a new lease on life, but Google operated Motorola largely at arm's length, and it now plans to sell the division to Lenovo.

It took more than two years after the Google deal for Motorola to release a phone that resonated with consumers. Its first device was the high-end Moto X, but not using the latest components and relying on software features to attract buyers turned out to be a miscalculation.

But thanks to the Moto G, the LTE version of that phone and the Moto E, Motorola's sales have turned a corner. The company apparently hit on a winning formula, offering phones at lower prices but with features good enough to please many consumers.

"As the market for flagship smartphones has softened and a lot of people are looking at buying devices without a contract, Motorola's Moto E and G seem to have really captured the moment," Wood said.

The strategy to pair decent specs with a low price isn't the only reason for Motorola's comeback. Avoiding the cluttered interface found on many other Android products also helped, according to Roberta Cozza, research director at Gartner. And while the U.S. remains an important market for Motorola, traction in India and a return to Europe have also lifted its sales.

Motorola is expected to release successors soon to both the Moto G and the Moto X. But with interest growing in low-end smartphones, the Moto G will face more competition this time around.

 

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