How cheap can the Moto X realistically be?
The Moto X Phone is certainly turning out to be an interesting piece of hardware, but recent news from a WSJ report suggesting that the handset may end up being priced directly against high-end handsets, like Samsung’s Galaxy S4 or the HTC One, has caused us all some concern.
Although we still don’t know exactly what hardware the device will be shipping with, or even what the final price point will be, let’s take a look at what Google and Motorola might do to secure themselves a decent share of the market, and hopefully make some profit from the Moto X.
Old tech doesn’t necessarily mean cheap prices
It’s important to remember that these are just rumored prices, and considering how dated some of the Moto X hardware is supposed to be, the handset could end up actually being cheaper than anticipated. $300 was the starting price for the Nexus 4, which has similar specs as the rumored Moto X, and as old hardware becomes cheaper over time, manufacturing costs should surely be lower. Alternatively, the specs might end up being more high-end, which would surely justify a higher price tag.
Of course, offering lower hardware specs in the same price range as the other top of the line handsets seems like a plan destined to fail, at least at a first glance.
But although we might think that the original rumored price of $299 would fit the Moto X’s specs better, we are a bit spoiled considering that the Nexus 4’s price was subsidized.
The Snapdragon S4 Pro might not be top of the line anymore, but the Xperia Z, which uses the same chip, certainly isn't a sluggish handset.
Motorola’s X Phone isn’t a Nexus device, so perhaps we shouldn’t expect it to be so cheap. Maybe, we should compare it to other decent handsets like the Sony Xperia Z, which is valued at around $570. A price somewhere around $550 would fit in quite nicely with the WSJ suggestion that the cost will be comparable with GS4 and other flagship handsets.
The Moto X is offering a fair bit of added value in the software and customization departments too, which certainly makes it worth a bit more than a standard mid-range handset. I’m not going to run through all the purported features, but customizable looks and software at the point of purchase is an idea which requires a fair bit of effort on the part of the developer, and is sure to add to the price of the phone. Handsets aren’t all about hardware specs after all.
Google, the sugar daddy
On the other hand, we know from experience that Google likes selling its products for cheap, and that it subsidized the cost of the LG Nexus 4 when it was first released. So it’s certainly possible that Google could do the same again.
An interesting quote from that WSJ report states that Google is prepared to do whatever it takes financially to get the Moto X off the ground, which includes the prospect of a very hefty $500 million plus marketing budget. Now, if Google can afford to spend that sort of money on marketing, surely it can subsidize the price of the hardware to undercut its competitors.
But that really depends on how Google sees the Moto X project, is it trying to gain a significant market share and directly challenge the likes of Samsung, or would the company rather start making some money from its large investment in Motorola?
In the former scenario you could certainly expect Google to go all out undercutting its competitors and splashing out on marketing. But if the company actually wants to make some money, it’s going to have to be more conservative, which almost certainly means a higher price point than a Nexus product.
We’ll have a choice of sellers
Thinking about it, there is quite a big difference between the two rumored prices. $299 or closer to $600, a rough price for the Galaxy S4, is a huge gap, but isn’t it possible that these prices could apply to different sellers?
Again, looking back at Google’s Nexus strategy, there was a price difference between devices sold directly from Google, which were cheap, compared with contract Nexus handsets offered by carriers. This allowed LG to make some money on contract handsets, whilst letting Google offer cheaper versions for people who didn’t mind paying a lump sum. It’s certainly possible that Google could do the exact same thing with the Moto X, which would also help Motorola turn a profit.
On the other hand, the more recent Google Play Edition handsets have been more expensive, when purchased directly through Google, than regular carrier handsets. I know these aren’t the same products, but if customization is limited to purchasing options offered by Google, then prices could be higher at the Play Store than on the high street.
Either way, we can probably expect some price diversity depending on where you buy your handset from, none of the rumored prices are set in stone.
So what’s most likely? It’s tough to say, but we could well end up somewhere in the middle of the rumors. The Moto X appears to be a mid-range handset in terms of hardware specs, but it’s probably going to end up offering customers a top of the line experience in terms of software and features.
With Google at its back, pricing will certainly be competitive, but I wouldn’t expect it to be “cheap”. And with various carriers on board as well, you can expect some healthy competition for the best deals.
But the important question is, what would you be willing to pay for a Moto X?