Rumor: Motorola might exit the feature phones business by the end of the year

June 25, 2012
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motorola feature phones Retrofones/Flickr

Motorola has a long and proud history of making feature phones. But now that cheap Android smartphones can replace feature phones that cost down to $80, and even less in the future, there’s little reason for Motorola to stay in the feature phone business. The feature phones segment implies razor thin margins,┬áif they even exist at all, and require manufacturers to push massive volumes just to cover expenses. Therefore, the rumor that Motorola will get out of the feature phone business by the end of the year won’t surprise any market watcher.

Motorola has just been acquired by Google, the maker of Android, so Google will naturally want to focus solely on manufacturing Android-based smartphones. But there also seems to be an interesting twist in Google’s strategy with Motorola. According to this quote from a┬áChinese-language┬áCommercial Times┬áreport, Google will not necessarily focus on making low-end smartphones with Motorola, but rather on the higher-end segment:

“It remains to be seen whether Motorola will also withdraw from the CNY1,000 (US$157) smartphone segment in China, since Google reportedly has been hoping that the handset vendor will switch its focus to the development of innovative products instead of counting on production based on economics of scale”, the paper said.

That’s very interesting, and it might mean that Google is not necessarily interested in volume, because Android manufacturers like Huawei, ZTE, and others can take care of that for them. Instead, Google wants to make high-profitability products that will push the market forward technology-wise.

Coupling Motorola’s future innovative devices with the pure Android experience will ensure that the other manufacturers stay honest and don’t get lazy with Android. If people will start preferring Motorola’s devices, the other manufacturers will be compelled to follow the same direction, which will make things better for all of us in the Android ecosystem.

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