Motorola moto e vs moto g (16 of 19)

Without doubt, Motorola redefined what the term “low-end” means with the Moto G. Now Motorola is trying to redefine it yet again with the Moto E.

This raises the question: why do the same thing twice in less than a year’s time? Motorola has a gap between the flagship Moto X and the entry-level Moto G. Why not try to fill that first?

According to Canalys, 5-inch plus devices grew by 369% in the first quarter of 2014, compared to a year before, significantly outperforming the growth of the global smartphone market. Indeed, throughout last year, regional brands like China’s Lenovo or India’s Micromax and Karbon had been able to enjoy tremendous growth by launching well spec’ed devices with large screens sitting in the low mid-range price bracket.

Currently, Motorola has nothing to offer in this high growth segment, but they don’t seem to be the least bit bothered by it. How could an underdog company looking to grow its market share be neglecting this potential?

This might look like a case of poor judgment by Motorola, but it isn’t.

Let me explain.

There was a chink in Samsung’s armor

Last year, an increasing number of emerging market consumers started looking for devices that would not only replace their old phones but also their netbooks. Manufacturers responded to this by flooding the market with a myriad of affordable large screen phones. As we discussed in a previous piece, among the most lucrative segments is the lower mid-range  price bracket (sub $350).

Naturally, Samsung had such a device in this segment, the Galaxy Grand. However, the original Galaxy Grand had poorer specs compared to similarly-priced or cheaper models from regional manufacturers. It had a 5-inch WVGA screen and an older dual-core chip, at a time when Chinese and local manufacturers had started offering phablets with 720p displays and quad-cores for the same price. Consumers were expected to shell out around $500 for the Galaxy Mega 6.3 to get a Samsung phablet with a 720p screen.

Things are different this year though, as Samsung’s Galaxy Grand 2 comes equipped with specs that are on par with its competitors and it is still available for less than $350. The lower mid-range phablet segment is no longer Samsung’s Achilles heel that competitors can easily exploit.

Competitors now have to look for other avenues to give their devices a competitive advantage over Samsung’s. For example, Lenovo now has two phablets with aluminum bodies and one with a glass back in the sub $350 segment, while Huawei and Asus are betting on even larger screen sizes to compete.

moto e vs moto g (5 of 19)

The low end is now Samsung’s Achilles’ heel

While Samsung might have properly patched a hole in its armor, that does not mean Samsung is now invincible. There is still a weakness that competitors can exploit, but this one is situated at a lower price point.

Look at Samsung’s present offerings in the sub $250 segment. Here, Samsung has phones like the Galaxy Ace Plus, Galaxy Core, or Galaxy S Duos, which, at best, are rehashes of the three-year-old Galaxy S2, or, even worse, the original Galaxy S.

In the Moto G's segment, Samsung is offering rehashes of the three-year-old Galaxy S2, or, even worse, the original Galaxy S.

That’s why the Moto G has been selling so well in places like India. In its price range, there is simply nothing from Samsung that could even come close to the Moto G in terms of specs or user experience.

This weakness becomes more apparent if we venture even lower down the price range.

For around $150, the Galaxy Fame comes with a 3.5-inch screen and QVGA resolution. In case you’re wondering, yes, that is the resolution of the 2007 iPhone!

Samsung is not the only culprit here. Outside of Xiaomi, which currently only operates in a limited number of markets, one would struggle to find a compelling device in the sub $150 segment from any manufacturer. No one’s losing sleep over the LG L5 II or Xperia E Dual, right?

With the Moto E, Motorola positioned itself to grab an even bigger share of the superlative growth potential available in emerging markets, by attacking the segment where Samsung, and most manufacturers, are now the weakest.

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There’s still growth to be had in mature markets, if you know where to look

While it is true that developed markets, like the US, are reaching their points of saturation, it does not mean that there is absolutely no growth left there.

UK-based research outfit Mediacells predicts that there will be 47.5 million smartphones sold to new users in the US this year.

Meanwhile, according to Consumer Intelligence Research Partners, there were around 28 million US customers that chose to ditch carrier subsidy in the last 9 months.

Because the Moto E’s price tag is close to the lower boundaries of what the average American consumers usually pay upfront for subsidized phones, Motorola is currently in the best position not only to attract new smartphone owners but also to lure people looking to leave the carrier subsidy model.

Competitors beware

By apparently ignoring the increasingly heated mid-range and high-end battle, Motorola has set itself in a good position to improve its market share, by exploiting potential growth available not only in emerging markets, but also in more developed regions.

That’s a smart move for an underdog, and competitors better take note or risk being left behind.

Bobby Situkangpoles
Coming from a place where phone subsidy is non existent, Bobby spent the last decade obsessing over getting the best bang for the buck when it comes to mobile technology. When not writing about mobile tech, he either provides linguistic services to local companies/communities or gets lost in his garage detailing old German cars. It is safe to say that swirl marks are something he just can't live with.
  • mjlowe

    Selling well-spec’ed phones at prices affordable to each market (E in lowest income countries, G in faster developing countries as well as off-contract in developed countries and X in developed countries) allows them to build/rebuild brand equity again. If they can provide a positive experience on the low end they can convince even the lowest cost user to stick with them in the future and possibly to aspire to the higher end phones next time. With the top of the market firmly dominated by Apple and Samsung this is a pretty smart strategy to try to come from the other direction, even if it will have to be mostly on volume for awhile, with a well-financed partner behind them in Lenovo they’ll be able to wait it out.

    • Aniruddh

      Yeah. The other underdogs are trying to attack with their high-end devices and failing. Samsung and Apple both have a strong brand image that won’t be tarnished, any time soon.
      Lower-end is where they can exploit, and a company that was desperate to survive was the one that was able to find the weakness and exploit it. Desperation…

  • Luka Mlinar

    They are as smart as they are stupid. They take the low end market because it is virtually untapped but then focus on the US, a hardest market to get into. This was by far one of the stupidest things Dennis Woodside ever did and it will resonate for some time.
    I even herd that making the phone in the US cost’s up to 5$ per phone yet they got nothing out of it because the average consumer doesn’t give a f*** where it was made. Americans consider phones made in China (iPhone) the best quality on the market.

    • T.J.

      They didn’t make them in America just so they could say it was made in America. They did it so you could customize it and have it in your hands in 4 days. You can’t do that with phones made in China. I customized my phone New Year’s Eve night around 8pm and received it January 3rd. That’s ridiculously fast if you ask me.

      • Luka Mlinar

        That’s a fun feature. Also creates a bottleneck in production and raises the cost of the device significantly. All that is a big price to pay just so you can have a green back that you get sick off in 3 months time. The shell thing was a lot better plan.

        • T.J.

          $5 per phone is significant? Maybe it’s not the right phone for you then.
          Getting the phone to the customer in a sorry amount of time is a big deal. Ask anyone if they’d rather wait a few days for a phone that they designed or 1 month. It’s easy to see. And the shell idea adds unneeded thickness.
          You might get sick of your phone in 3 months but I sure don’t.

  • Amit

    As mentioned moto g is the thing that others are not offering without loosing recognized brands..
    Samsung sold much more stupid galaxy y and galaxy ace family in India than S2..
    Motorola will eventually grab lot of total market share with this strategy

  • Hey! I have an Xperia E! Although I’d have got a Moto E had I known that it was coming…

    Motorola is selling well in India, want to know why? Cause it’s a brand they’ve heard of from the reign of dumb phones (unlike Micromax, XOLO and others), it’s offering amazing specs (unlike Samsung, Sony and the like), and it looks amazing (most regional brands sell Chinese imports that all look practically the same).

  • RarestName

    Can’t wait for a company to redefine phone size.

  • Max

    The Moto phones are more probable to have unofficial ROMs. That makes them my choice.
    Also, Moto has only few devices. Samsung has a plethora of Galaxy Fame, Galaxy Ace, Galaxy Potato, Galaxy Potato S3 Active X and so.
    “One device to rule them all”.

  • Planterz

    Quality low-end phones aren’t just a boon for “emerging markets”. The rest of the world might think of America (and Canada, and UK) as “rich”, but the majority of people aren’t. Yeah, iPhones, Galaxy flagships, and the like are popular. But so are cheapo Samsungs, Alcatels, Lumia 520/521s, and Hauweis. Because not everybody can afford an expensive phone off-contract, or wants to get locked into a contract, or has the credit rating to even be approved for a contract.

    Motorola has hit a gold mine with these phones. They know what they’re doing. 4.4 Kit Kat is optimized for low-end (or old) devices, yet they’re still giving them 1gb of RAM. Combined with a nearly stock Android, these phones run smooth and quick. Far, far quicker than a Samsung with its heavy TouchWiz overlay, and no bloatware. What Samsung needs to realize is that most people – especially those buying cheap phones – is that the customer doesn’t give a rat’s ass about their software suite. They just want a phone that works without frustration. Motorola is delivering that.

  • Tommy

    Motorola has set a new standard with the Moto E. No longer can phone manufacturers complacently issue hamstrung devices that only look, but don’t really act, like smartphones. And if you have decided to become a proud owner of this device, perhaps you’re in the market for a solid and beautiful protection case as well.