Watch out Samsung, Motorola can spend half a billion to market the Moto X

July 11, 2013
To get the Moto X off the ground, Google is reportedly making available to Motorola up to $500 million for marketing and promotion.

    dennis woodside motorola ceo Ricardo Bilton/VentureBeat

    To be successful in the smartphone business, it’s not enough to make the best hardware or the prettiest looking device. Marketing is just as important, and, some say, the biggest factor that decides the ultimate fate of a product. The living proofs are Samsung and Apple, the two behemoths of the smartphone industry and the only two companies to actually make meaningful profits out of it, which both spend lavishly on marketing.

    Several hundred million dollars—and possibly upward of $500 million

    With Google’s blessing, Motorola is planning to follow Samsung’s and Apple’s lead in big marketing, reports the Wall Street Journal. According to the prestigious publication, which cites the usual “people familiar with the matter”, Google is willing to do whatever it takes financially to get the Moto X of the ground. This means that Dennis Woodside, the CEO of Motorola, will get to spend “several hundred million dollars—and possibly upward of $500 million” to market the upcoming flagship smartphone. The money will be spent to spread the word about the Moto X in the US and other markets, including in Europe, says the WSJ.

    Big marketing budgets weigh heavily in the carriers’ decision to sell a smartphone. Motorola’s brimming war chest is probably one of the reasons all major networks in the US have agreed to carry the Moto X. According to the WSJ report, the device will become available “this fall”.

    Another piece of good news is that Motorola managed to convince carriers not to stuff the Moto X with bloatware, the mostly useless apps and features that carriers love to fill devices with. This is another sign that Motorola has a promising product on its hands.

    The report goes on to confirm the ABC News leak that said customers would be able to select the color of the Moto X’ casing and pick a text to be engraved on the device.

    Google may end up spending more money than {Apple and Samsung} on the Moto X phone alone

    Half a billion dollars is a lot of money to spend on marketing for one device. For perspective, Apple and Samsung spent $333 million and $401 million respectively for advertising in the US last year, but that covers their entire range of devices, which in Samsung’s case is quite extensive. It’s not clear from the WSJ’s report how Motorola would spend the marketing budget, and we have to consider that the money will be used in other markets besides the US. Even in these conditions, “Google may end up spending more money than that on the Moto X phone alone” said the insiders.

    One last important tidbit in the WSJ report: the Moto X may not be as cheap as we thought – the price of the device may, in fact, be comparable to that of competitors such as the Samsung Galaxy S4, HTC One, or iPhone 5. This goes against rumors and speculation that the Moto X would sell for $299 or less, contract free. We’ll have to see which report turns out to be accurate, but we don’t have to tell you what we hope for.

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    • brararsh

      Samsung emerged as a world leader in smartphones but now the innovation has slowed down. Developers dont work on Samsung devices as source code is not readily available. There are several phones with same design and sometimes it gets difficult to distinguish 2 devices.

      LG, HTC and Motorola have a better chance now as people want change, same was the situation with Nokia 3-4 years ago. Anyways Samsung’s situation is better than Nokia but will definitely fall in coming years.

      ETIT: On Topic, This increase in Marketing cost will definately increase the selling price as Googorola will keep more margins to extract the marketing cost from the profits.

      • najiy91

        good point(“,)

      • http://AndroidAuthority.com/ Bogdan Petrovan

        I am not sure they’ll try to get their money back right from the beginning. Google has deep pockets and they afford to wait 1-2-3.. years to get a return on their investment. I may be wrong though.

        • Trent Richards

          I think you are spot on Bogdan. Google does that quite a bit with their investments. Look at Android itself for that matter. As a recent example, look at the Waze purchase and how Google will allow them to operate independently from Maps for the time being.

      • Jokesy

        Hah! You need to get out of yourself. You understand nothing about business.

        Brand, Support, Reliablity, loyality and Consumer trust are all that really matters. That’s why Apple and to some great extent, Samsung, will always sell no matter what you armchair business experts think. To postulate that Samsung (I’m sure you are part of the people predicting Apple’s bankruptcy) will definitely fall in coming years without any concrete substance is laughble.

        Motorola doesn’t really exist outside US and they are in deep water, HTC is very much troubled at this moment and they also lack those qualities. LG is trying but they are not that relevant at the moment.

        Sony, LG (to some extent) and some Chinese Smarphone companies may be the ones to look out for in the coming years. Those companies will be very comfortable with selling 15-20 million smartphones per quarter but only time will tell.

    • Blowntoaster

      Google may end up spending more on Marketing than what it will make out of the device. I sure hope the Moto X phone/Range brings the goods at the right price. I’d surely like to use one if it lives up to the rumours/hype.

    • domahman

      If the product sux and they spend half a billion putting eyes on the defect, it’s gonna back fire. They better release a more than decent product.

      • http://AndroidAuthority.com/ Bogdan Petrovan

        I am 99% they’ll put out a decent device. For most people, that would be enough.

    • Topcat488

      The Moto X had me on its side up until the last paragraph. Marketing is very important, but don’t expect to get the price of a high-end device, with mid-range specs… No matter how much money is spent on ads, the people are not stupid.

    • Tony Hoffman

      500 million to market outdated hardware? Doesn’t smell right.

      Google/Motorola are one of two things..

      1. Incredibly good at controlling leaks and making people believe what we are about to get its a mid range device when it’s actually going to be the device of this year with hardware equivalent to LGG2..

      2. Incredibly stupid.

      In my world I’d like to believe the x phone is a family of customizable phones based on tiered hardware options and that 500 million promotes the family of phones that reach every type of cell user

      • MasterMuffin

        I’m afraid it may be #2, but #1 sounds much better. Good thing is that Google is an ad company so it can advertise Moto X for “free” (the ads will take space from paid ads though)

      • MasterMuffin

        I’m afraid it may be #2, but #1 sounds much better. Good thing is that Google is an ad company so it can advertise Moto X for “free” (the ads will take space from paid ads though)

      • http://AndroidAuthority.com/ Bogdan Petrovan

        It may be outdated hardware for you and me. But for the regular smartphone user, 720p and dual-core S4 Pro is perfect. We in the Android work are spoiled with quad-core and octa-core and the highest pixel densities, but the other platforms offer “mid-range” specs and nobody complains.

        I think that an overall decent device with a few special touches and a boatload of money in marketing could be very successful.

      • http://AndroidAuthority.com/ Bogdan Petrovan

        It may be outdated hardware for you and me. But for the regular smartphone user, 720p and dual-core S4 Pro is perfect. We in the Android work are spoiled with quad-core and octa-core and the highest pixel densities, but the other platforms offer “mid-range” specs and nobody complains.

        I think that an overall decent device with a few special touches and a boatload of money in marketing could be very successful.

    • Jokesy

      Lumia devices are the most marketed smartphones in my country, yet nobody buys them. Motorola is not really a brand anymore outside US and I don’t a jackload of Marketing can change that.

    • Danilo pedroso martins

      too much money on a midrange (what I heard from rumors)

    • nishantsirohi123

      -shutting shop in India and most asian countries

      -Verizon Exclusive in USA
      -not updating the Gingerbread era flagships

      way to go MOTO

    • Windowz_rules

      I hope its no contract and less than $400

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