The renaissance of Android’s Google OEM: The Motorola story

November 22, 2013

    Moto X

    Exciting things are happening at Motorola. It’s been a tumultuous few years for the company that produced the first cell phone, but it has once again found the cutting edge. The Moto X is the first smartphone that’s always listening for its master’s voice, hinting at the largely untapped potential of Google Now. The Moto G has the aggressive pricing necessary to totally disrupt the smartphone market and loosen the carriers’ stranglehold. Google’s acquisition of Motorola Mobility is finally starting to bear fruit, could this blossoming herald a renaissance for one of mobile’s founding fathers?

    Deep roots

    Motorola Police Cruiser Large

    Motorola World War 2 Soldiers Mobile RadiosMotorola’s credentials as an innovative electronics company in the U.S. could hardly be stronger. It was founded in 1928 when the Galvin brothers bought some manufacturing equipment at auction. Starting out with five employees, the first week’s payroll was just $63. The first product was a device that enabled battery-powered radios to be powered by household electricity.

    Moving into radio manufacture in 1930 the company found its first great success with car radios. The product also inspired the name Motorola, but it didn’t officially replace Galvin Manufacturing Corporation until 1947. By the end of the 1930s Motorola was a well-known brand producing home radios, phonographs, and two-way radio equipment.

    The 1940s saw a major military contract for the “Handie-Talkie” portable two-way radio. As the decade progressed Motorola radios found their way into taxis and a car radio telephone service run by Bell in Chicago. The company also began to manufacture affordable television sets. With a strong commitment to research and development spending, the innovations just kept on coming. Motorola produced the first commercial high-power transistors in 1955, a paging system the same year, a low power two-way radio for vehicles in 1958, and the first cordless portable TV in 1960.

    Its pioneer status at the cutting edge of technological achievement was neatly summed up when Motorola equipment was used to convey the message “that’s one small step for man, one giant leap for mankind,” in 1969.

    The mobile phone

    motorola-dynatac

    Nixon was in the White House and the Vietnam War was still raging when Motorola demonstrated the first portable cellular phone in New York in 1973. It took another ten years for the DynaTAC to reach consumers. Motorola still produced a lot of radio technology and semiconductors which supplied some of the big names, like Atari and Amiga, in the home computing revolution, but the mobile market was beginning to take off. The clamshell or flip open design was pioneered by Motorola in 1989 with the MicroTAC.

    The line was refined throughout the 1990s and the company also enjoyed some success with two-way pagers, proposed the first all-digital HDTV standard, and got involved with the Internet revolution, producing cable modems and making a VoIP call. Mobile phones were the largest part of its business and Motorola was the biggest manufacturer around for a few years, but by the end of the 90’s Nokia had taken the crown.

    An incredible success with the Motorola Razr line starting in 2004 masked Motorola’s decline. The V3 was a rare blend of fashionable design and function and it sold more than 130 million units in four years. The problem was that Motorola got bogged down trying to repeat that success by churning out more Razr-inspired models with ever decreasing margins. The innovation that had served it so well was nowhere to be found when the competition started selling touchscreen devices, 3G networks took off, and the smartphone age dawned.

    Late to the smartphone party

    Motorola DROID and RAZR

    Motorola DROID and RAZR

    Things were looking pretty bleak for Motorola as 2008 began. The company had sold 1.5 million Razr sequels in the last quarter, but lost £388 million. Apple sold 2.3 million iPhones in the same period. Samsung had leapfrogged Motorola in the manufacturer charts. Investors were already floating the idea of spinning the mobile business off into a separate company to protect the profitable side, which was engaged in set-top boxes, radios, scanners, and network equipment. There were lay-offs and defections to Apple. Market share fell below 10% and it was only going in one direction.

    In 2009 Motorola announced its first Android smartphone. The Motorola Cliq would be launched on T-Mobile in the U.S. and sold as the Dext in the rest of the world. It ran Android 1.5 Cupcake and had a 3.1-inch display with a 480 x 320 pixel resolution, which slide aside to reveal a full QWERTY keyboard. The design was bulky and the Motoblur overlay made the phone sluggish and delayed an Android update to the vastly improved 2.1. The Cliq launched in October 2009, but it was soon eclipsed by another Motorola phone which hit the market the next month.

    This is the Droid you’re looking for

    Motorola DROID for Verizon

    Motorola DROID for Verizon

    Verizon made the decision to carry some Android devices and the company put some serious marketing muscle behind the move. AT&T still had an exclusive hold on the iPhone, which wouldn’t come to Verizon until 2011. The carrier needed an alternative that could compete. Licensing the Droid name from Lucasfilm it worked with Motorola and Google to launch the Motorola Droid, the first in a long line of Droid handsets. The Motorola Droid was marketed as a real iPhone alternative and the “Droid Does” campaign focused on the features that were lacking in Apple’s flagship.

    The Motorola Droid was the first phone to run Android 2.0, Eclair, and it had an impressive set of specs. It had a 3.7-inch touchscreen with an 854 x 480 resolution, a 600MHz processor, and a 5MP camera. There was also a physical keyboard and the Droid was mercifully free of Motoblur. The reviews were good and, according to Flurry, the Droid sold over a million units in its first 74 days on sale, which eclipsed the Nexus One and also beat the original iPhone.

    It looked as though Motorola had turned a corner and the 2010 follow ups to the Droid were pretty successful too, especially the Droid X. Motorola’s handset division was briefly profitable again, but the company failed to capitalize on its Android success outside the U.S. and competition was stiff with Samsung and HTC scoring serious hits on the platform. Bizarre experiments with new form factors, like the Backflip and the Flipout were pretty disastrous.

    Back into the red

    In January 2011 the company was split apart, breaking into Motorola Mobility and Motorola Solutions. There was still doubt about the long term prospects for the mobile division and it proved to be well-founded.

    Motorola Mobility tried to innovate with the Atrix. It was one of the first Android smartphones with a dual-core processor, but the real selling point was its ability to double up as a laptop with a special docking peripheral. It even had a fingerprint reader. There was a lot of excitement about the Motorola Atrix, but it just didn’t take off.

    motorola-atrix-fingerprint-sensor-chestertan ChesterTan

    The first tablet to run Google’s new tablet-friendly version of Android, 3.0 Honeycomb, was the Motorola Xoom. Despite favorable coverage it was too expensive to make a real impact in the market and it didn’t sell anywhere near as well as Motorola had hoped.

    Attempts to innovate continued as Motorola tried to revive its past successes with the svelte Droid Razr. Released at the end of 2011 it had solid specs and was marketed as the slimmest smartphone in the world at 7.1mm. It also had Kevlar coating on the back for durability. It was an attractive, premium device and it garnered good reviews, but there was something wrong with Motorola’s strategy.

    Samsung, Apple, HTC, and even LG were outperforming Motorola. The company was producing good devices, but they were expensive. Releases were also limited internationally and hamstrung by carrier exclusivity in the States. Major delays to its first 4G LTE phone also did some damage. The company failed to capitalize on the Android boom and missed the excitement around 4G. By the middle of 2011 its share of the market had fallen to 4.1%.

    Google as white knight

    In the summer of 2011 the news broke that Google was going to acquire Motorola Mobility for $12.5 billion. The deal wouldn’t be completed until the following summer. The general consensus was that Google needed Motorola’s patents to arm in it in the ongoing patent war with Apple and Microsoft, especially after Google missed out on the Nortel patent package.

    Google_Motorola_sign

    The idea that Motorola might return to form and challenge the major smartphone players again was dealt several blows as Google sold off parts of the company and shed more jobs. The underwhelming releases continued and the market share fell lower and lower. In February this year Google’s CFO shed some light on the process, “We’ve inherited 18 months of pipeline that we actually have to drain right now, while we’re actually building the next wave of innovation and product lines,” Pichette explained.

    So, Google was flushing out the old and sculpting a new, leaner Motorola that might signal a return to form.

    The Moto X and the Moto G

    The Moto X offers one of the best smartphone experiences on the market today.

    The Moto X offers one of the best smartphone experiences on the market today.

    The first Motorola device to bear the hallmarks of Google’s influence was the Moto X, released in August. It has been well-received and it highlights new potential directions for Android OEMs. The tie in with the fast-improving Google Now and those always listening, always ready sensors could pave the way for more hands-free operation; something that’s bound to be an important factor for wearable tech as well. It’s also relatively affordable and offers some interesting customization options.

    A limited U.S. release for the Moto X hints at some traditional problems for Motorola and it frustrates potential customers in the rest of the world. It’s too early to say how successful the Moto X might be, but the company certainly isn’t hanging around to find out.

    The brand new Motorola G is both excellent and low priced.

    The brand new Motorola G is both excellent and low priced.

    The Moto G has definitely sent a few shockwaves through the market. Motorola’s CEO, Derek Woodside has been talking about the potential of budget devices for a while now, but no one saw this coming; a smartphone for $179 off contract with impressive specs and version 4.3 of Android with 4.4 to follow very soon.  The wide international release reveals Google’s ambition to ensure that emerging markets are buying phones with its software and services on board.

    This price point potentially frees people from the tyranny of the two-year contract. It also shows a commitment to making sure that Google’s services run, and run well, without needing the latest cutting edge hardware. This move could signal Google’s route to dealing with fragmentation once and for all, and it will undoubtedly serve the company’s ultimate aim of pulling more people into its ecosystem.

    For the first time in a long time there are compelling reasons to buy a Motorola. The fact that Android 4.4 took just three weeks to roll out on the Moto X bodes well for future updates and the Moto G is clearly the best budget smartphone available right now.

    Motorola Mobility is no stranger to success, but its fate as “a Google company” has been hard to predict until now. We think a return to form and fortune lies ahead.

     

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    Comments

    • Shark Bait

      I think google are deffinatly on the right lines reshaping moto. Both products seem solid so far. I just wish for a real high spec phone from them and international availability for the moto x will get them back into the black

    • iamtravis182

      Moto might not be making shock waves in the industry right now, but give them a few years. As they capitalize on the new “Moto” brand, and I’m sure the X will have a successor, they will gain more popularity.

      it wasn’t really until the 3rd generation of Galaxy S’s (S3) did Samsung become a household name and began poaching customers from HTC/Moto/Apple.

      As the Moto brand grows, so will their market share and success.

      • Shark Bait

        I think their like nokia , most people have owned one in the past so are familiar with the brand, but it needs rebuilding and will be a success if they keep going like this .

        The moto G could be the perfect way to pull some of these old customers back

        • iamtravis182

          I agree, but Moto will probably have a more successful rise. Moto is utilizing a successful OS and ecosystem…can’t say the same for Nokia, although, Nokia’s hardware is pretty good.

          • Shark Bait

            Yes their will not be another nokia phone for a long while now ……
            Motorola does have alot more going for it, mainly google services and their hardware is great too!

            • iamtravis182

              Unless you count a “Nokita” (er whatever its called).

            • Shark Bait

              I do like the sound of that, I hope they do we’ll but I guess they’ll struggle without the name

      • MasterMuffin

        They should start selling internationally and advertising more to actually get good sales. Want to buy a Moto X? To bad you you live in Europe/Asia/whatever

        • MadCowOnAStick

          too*

          • MasterMuffin

            That’s what it says ;P

            • MadCowOnAStick

              -_- xD

      • AbbyZFresh

        Yeah, people forget that Samsung has been releasing phones for many years before the S3. It takes time to build a brand. Especially rebuilding a brand that was known for having horrible updates prior that is now their main strength.

        • iamtravis182

          Ugh. Don’t forget Motoblur.
          The memory of Motoblur running on my Droid X2 is sickening.

          • Котенок

            I’d like MotoBlur – it was pretty helpfull

          • Richard Sequeira

            Oh yes! Motoblur is the reason why I had a ton of customers asking me to remove from their phones.

      • Thang Fozika

        As the Moto brand grows, so will their market share and success. http://noithatkuongthinh.com/may-hut-mui-napoli-1068157.html

    • jhedpredon

      I’ll wait for the Moto X2. when it’s finally available outside the states. Can’t wait till they finally beat Apple and Samsung :)

    • Luka Mlinar

      I know the history all to well. This is why i am one of the biggest critics of
      Dennis Woodside and the wrong direction he and Regina are taking the company.

      • http://www.AndroidAuthority.com/ Darcy Alexander LaCouvee

        Care to elaborate a bit further, Luka?

        • Luka Mlinar

          The X8 was a fail. It took everyone time to figure it out but but slowly they are getting there. Probably the biggest wrong they did was the distribution. Making it so you need to spacial order each phone is like making a tunnel for trucks that’s wide enough for a small dog. OPPO started doing something everyone should have done by now. Put a giant amazon like hanger in the center of north/south America, Europe… and sell your phone trough web-shops. Not exclusively but the main focus should be directed there. To go back to the X8, they basically put them selves in a hole. They can’t continue with it since it’s at this point nothing more then a gimmick and not a good one at that. If they stop they will acknowledge the fact that it failed. HTC can do this once or twice a year without anyone noticing but this is Motorola’s first phone after the Google takeover. It took theme a decent amount of time to work on a single phone and it flopped. Don’t get me wrong Motorola did innovate back in the day, but not like this. They always knew where the market is going. Going with voice command is a rookie move. Moto G is good but it’s the same design. Looks like a lazy man just threw a bunch of stuff in an old case.
          It’s bean a year and a half and they made 2 phones with the same design. A nonexistent distribution network. No plans to make new phones. Spending all their time on electronic tattoos like the whole thing is some childish playground for Regina and Dennis who i at this point imagine to look like Peanuts characters.

          • T.J.

            90% of reviews of thefrom from Motorola since Google v boughmotoo x are positive. The X8 helps keep the battery life great and the phone fast. You obviously don’t know what you’re talking about. I really doubt you have even used this phone for more than a couple weeks.
            It’s the first phone from Motorola since Google bought them so obviously it won’t sell as well as an S4 which has had many phones in its series leading up to it. They’re building their brand back up. Give it a year or two and you’ll see.

            • Luka Mlinar

              If the point is to make a concept phone then i suppose X was a good job. If they want to sell phones as much as Samsung then they did an awful job. It’s as simple as that.

            • T.J.

              Like I said, give them a year or two. They’re rebuilding their brand.

    • Groud Frank

      I don’t own a Motorola phone and never did in the past but that will change soon. They are fast becoming my favourite OEM. The quick updates is perfect bait for catching my money.

    • Sanyi

      Is bootloader unlockable on Moto G (SIM free)?

    • Wezi427

      I believe that Motorola is a great company. People have been saying that Google should have bought Nokia. They are both good companies, but Motorola is the better company.
      I’ve always been fond of the product they have made. I have a RAZR Maxx and Xoom.It’s always been a quality product. I think they they need to stop the exclusivity they have with Verizon.
      I think the Moto G should have had 4G. You would have seen that phone take off. I’m currently with Verizon and I have unlimited data. A phone like that would allow me to keep my data without breaking the Bank.
      I would like to see Motorola rise near the top like they once did.

    • Oli72

      Awesome article.

    • Mobile Phones Fan

      You’ve neatly skipped over what is arguably the most interesting part of Motorola’s recent history: in 2011, then-CEO Sanjay Jha telegraphed their desperate straits by threatening patent suits against every phone maker in sight…including the other members of Android’s Open Handset Alliance.:

      http://www.fosspatents.com/2011/08/motorola-doesnt-have-license-to-kill.html

      My apologies for linking to FOSSPatents, but in this one instance it offers the single best overview of the topic, including background on how Motorola shareholders — notably, activist investor (and all-around loudmouth), Carl Icahn — were instigating to extract value from the company’s vaunted trove of IP.
      .

      • allyson

        Care to elaborate a bit further, Luka?

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