Moto X is Motorola’s chance to break free of the middle

When Google first bought Motorola Mobility a couple years ago for $12.5 billion, the industry assumed it would use the historic mobile phone producer to take over the Android market, ensuring that Android devices ran the pure Android user interface and eliminated the awkward skins and all-over-the-map quality marking many Android makers. Instead, Google basically chased out Motorola’s key employees, shut down its 3LM security group, and teamed with Motorola rivals to produce a series of mediocre Nexus smartphones and Nexus tablets under the Google brand.

The industry has been scratching its head over Google’s rationale for buying Motorola and all but eviscerating it at a cost of more billions of dollars. Maybe its patent portfolio was worth the money, so why keep the hardware? Having a manufacturer on hand to use as a weapon against Samsung if ever needed seems too pricey a stick. As a foundation for innovation, the Motorola purchase was also puzzling, given Motorola’s history of so-so phones punctuated occasionally by hits like the StarTAC and the original Razr. Most of the time, Motorola focused on middling products that it would milk far too long.

Google’s own Nexus products have also been middling, so neither Google not Motorola Android devices have gained much adoption, turning Android into a Samsung-dominated platform. But as part of the company’s newfound discipline under CEO Larry Page, there have been signs this year that Google would aim higher. When rumors appeared this winter of the “X” effort to create a new generation of smartphones, the punditry started to believe that Google had decided to destroy Motorola to save it, putting the inventor of the car radio through a wrenching reeducation to lead us to a marvel that would reveal itself later this year.

Moto X looks to be more of the same, just like the new Droids On Thursday, Motorola will unveil the Moto X. Already, many details have leaked — in what appears to be a coordinated effort by Motorola, given the level of detail and images. Unless this is a huge head fake being perpetrated on the rumormongering Web media, the Moto X unfortunately looks to be, once again, a squarely run-of-the-mill product — more like a Google Nexus than an Apple iPhone 5, HTC One, or Samsung Galaxy S 4.

The only leaked feature that seems partially interesting is the new Camera app and its minimalist user interface, which promises to simplify picture-taking, especially when you snap a series of images. The purported use of Magic Glass — a strengthened version of Corning’s widely used Gorilla Glass — that will wrap around the edges (according to one report) may give the Moto X some manufacturing bragging rights as well, though it won’t matter much to users.

Last week, Motorola unveiled a series of updates to its mediocre, and poorly selling, Droid Razr lineup — now rechristened just Droid and sold only by Verizon Wireless — that uses what appears to be the same Camera app as in the Moto X. The new Droids are as milquetoast as the old Droid Razrs — decent devices but nothing to brag about — with a reworked Kevlar skin that’s apparently the biggest hardware change. Oh, you’ll also be able to order the color of Kevlar you want. That’s made some pundits very happy, even though user-changeable color backs have been offered on other Android smartphones for some time.

One model, the Droid Maxx, promises two-day battery life, which is what its Droid Razr Maxx predecessor also claimed. Rumors suggest the Moto X’s battery should now last a full day — which the iPhone has locked up for years, but all-day battery life is less common in the Android world. It would be a good thing if the Moto X achieves that feat.

The Moto X is reputed to do better in surviving a fall than other smartphones, but we won’t know that until we get to drop a few. And it will be made in Texas, Motorola’s manufacturing center for many years until everything got sent to China.

Are you still awake? Incrementalism is so soporific.

The case for being middling Sarcasm aside, there’s a reason Motorola may want to aim so squarely for the middle. There’s a large contingent of industry and financial analysts who believe the era of the high-end smartphone is over, that iPhones, Galaxys, and Ones have peaked as enthusiast users are now fully saturated as a market. Meanwhile, poorer people — especially those outside the United States, Canada, Europe, Japan, Taiwan, Hong Kong, Singapore, and South Korea — are where the sales action will be, and they can’t afford high-end devices.

Evidence for that belief are the growing sales of really cheap (and cheaply made) Android smartphones throughout Asia, the slight shift in iPhone sales to lower-cost older models, and high but not sky-high sales of the Galaxy S 4.

It’s the McDonald’s phenomenon: Many more people buy cheap fast food than middle-priced fare like that of a Macaroni Grill or Applebee’s, much less than that of a high-end French or Japanese restaurant, à la Hubert Keller or Masaharu Morimoto.

Apple is in the business of making money, so it takes in about three-quarters of the mobile industry’s profits and half the PC industry’s profits, despite its small market shares. But other companies are in the business of market share, taking thin margins on huge volumes. That’s long been Samsung’s strategy (its Galaxy devices were a change in that approach), and it appears to be Google’s and Motorola’s plan. They’d rather be Macaroni Grill or Applebee’s than a celebrity chef.

If the goal is to get as many people as possible to use Android, so Google can make money off them through ads and privacy-stripping information services, the middling strategy makes sense. I suspect that’s exactly the reason for the middling Nexus and Motorola product lines.

But if pervasive sales is the goal, it would make more sense to be McDonald’s, not Macaroni Grill or Applebee’s. Google’s middling Nexus line is a great example. Sales figures for most of its devices are hard to come by, which means they’re small, but the Nexus 7 tablet that reenergized the 7-inch tablet market a year ago (and for which a new, higher-quality version debuted last week) sells about 800,000 units a month, according to date from its manufacturer, Asus.

It also inspired Amazon.com’s Kindle Fire HD, which seems to have similar sales figures, though no one but Amazon knows for sure, and it’s not telling. By comparison, all iPad models sell about 5 million units a month combined. No one knows how well other Android tablets sell, although worldwide Android tablets are estimated by IDC and Gartner to outsell iPads 2:1, mainly due to very cheap ones sold in Asia.

In other words, middling tablets aren’t outselling high-quality units, much less blowing them out of the water, even though the Macaroni Grill business model says they should.

If the goal is near-universal adoption, Google and/or Motorola should be making truly cheap ($100 with no subsidies) Android smartphones, and/or figuring out how to lower cellular data costs, which at about $500 per year in the United States is the true financial barrier to entry for poor people. After all, Google is trying to break the broadband monopoly’s pricing with efforts like Google Fiber. Why not with cellular, which is the sine qua non for mobile adoption?

Even if near-universal adoption is the goal, having a flagship or two that inspires people to want the brand is important. Apple knows that, and Samsung and HTC have learned that lesson as well: People talk about the Galaxy or One, even if they end up buying a lesser model due to budget. The (flawed) Chrome Pixel and the new Nexus 7 seems to indicate that part of Google at least understands that as well — they have high-quality components that can, on paper at least, compare to Apple’s products or Samsung’s high end.

The reason for the middling-only product strategy of Motorola isn’t clear to me. Motorola’s unhappy history under Google, as well as Google’s poor showing with most of its Nexus products, doesn’t give me hope that those executives have figured out something the rest of us haven’t. But maybe they have. Moto X is the chance to prove it.

This article, “Moto X is Motorola’s chance to break free of the middle,” was originally published at InfoWorld.com. Read more of Galen Gruman’s Mobile Edge blog and follow the latest developments in mobile technology at InfoWorld.com. Follow Galen’s mobile musings on Twitter at MobileGalen. For the latest business technology news, follow InfoWorld.com on Twitter.