Google’s Strategy with the Moto G and KitKat

I’m observing several interesting things from Google’s moves as of late. The first has to do with the recently launched Motorola G, premium spec smartphone at low-end prices. The Moto G has a $179 price point. This price range is a significant part of global smartphone sales in developing markets. See the slide below which shows the most recent snapshot of the global smartphone vendor market share.

Screen Shot 2013-11-13 at 9.22.16 AM

Notice who is missing from this chart? Motorola. From meetings I have had with their teams it was made clear to me that Motorola wants to push to be a more global brand playing in more global regions than they are today. The release of the Moto G is a step in this direction. The handset fits the spec and price range that should make it attractive in the markets they choose to go after. Adding dual sim for India and Brazil makes them a potential competitor for Samsung, Nokia and other regional brands competing at the non-premium price points.

While I think the price is interesting, Motorola will be going up against local brands in markets like India and it will be interesting to see if they can compete with the more established local brands. Brazil, Russia, and other parts of Europe are likely targets as well.

The key for Motorola will be marketing. Right now their brand is not strong globally at a handset level and if they are serious about becoming a global player developing regionally relevant solutions, they need to build their brand in those areas.

KitKat

Several things have happened with KitKat that I have observed and found interesting. First, the UI seems to be a departure from the more geek centered focus and feel that prior stock versions of Android had. This happens to be one of the things I liked most about stock Android and Nexus devices. KitKat seems to be a OS transition from appealing to geeks to appealing to a more mainstream audience.

Second, it is much more deeply integrated with Google services. Each stock version of Android was always positioned as the best of Google but KitKat takes it to a new level. This is incredibly important. Google’s stock Android solutions get installed on the majority of mid-low range smartphones and tablets. Most vendors just take the generic AOSP, load it on their hardware and go to market. Only a few vendors actually change or ‘skin’ their Android devices with custom software work before they go to market. Samsung, HTC, and Xiaomi being the notable ones. For most other vendors stock Android is what gets shipped. This is why over the past 6 month’s Jelly Bean (version 4.1x-4.3) is now used on nearly half of all devices that have been shipped over the same time frame. Many new devices going to market run the latest OS. We don’t see this in the US but it is true in emerging markets.

For this reason, I feel Google is trying to get a handle on Android’s fragmentation as it specifically relates to their services. As I, and several other analysts have pointed out, Google’s services are practically nonexistent in many emerging markets where locals favor local services over Google’s. This is anything from email, social services, messaging apps, and more. My read with KitKat is that Google understands Android’s growth in the low-mid range is where the volume is and they have yet to capitalize on that market from a Google services standpoint. Android had for the most part been hi-jacked by the low-end and adding no value to their ecosystem. I believe KitKat is a step in the direction to address that.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

5 thoughts on “Google’s Strategy with the Moto G and KitKat”

    1. I think that’s a great question! I just wonder if Google could reverse back into China through Xiaomi and other handset vendors by white labelling it’s core services.

        1. This is certainly good speculation since one of Google’s own went to Xiaomi. The challenge Google has in China is that their services are blocked by the Chinese government at a services level. My thinking in the short term per the KitKat part of this was that KitKat being installed on a large number of these low-end and generic smartphones and tablets in places like India, Russia, Latin America, and other growth areas become step one for Google to bring their services front and center to those regions.

          China is a tough nut for Google and I’m really not sure what they can do there if anything due to the Governments stance on them.

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