Google Enters a Crowded Market With Moto X

The time has come for Google, the king of online search, to show whether it has any business selling hardware. After lackluster results selling devices made by other companies, Google is giving hardware another try — this time with a smartphone made by a company it owns. On Thursday, Motorola Mobility, the handset maker Google bought last year for $12.5 billion and then retooled, introduced the Moto X, the company’s first major device since the deal. The phone has all the standard features expected of today’s top smartphone, with a twist: the ability to control the phone by talking to it, without lifting a finger. The stakes are big for Google, and not only because of the high price that it paid for Motorola. Google is enormously profitable, but its growth is slowing because of lagging ad sales. The company has been aggressive in absorbing Motorola. A major marketing effort is expected for the Moto X. “I think we’ve created an awesome company,” said Iqbal Arshad, Motorola’s senior vice president of global product development. The phone, decked out with multiple processors, sensors and voice controls, is landing squarely in the brutally competitive market for high-end smartphones. Motorola’s executives think they have something special with the Moto X, which will be sold by all the major American phone carriers beginning in late August or early September. The phone learns the voice of its owner and responds only to it. The Moto X is a big step in that direction. One low-powered processor in the phone is devoted to processing natural language. The design of the computing system allows the phone to constantly listen for the user’s input and quickly respond without constantly draining the battery, he said. (The phone’s battery is supposed to last 24 hours handling various tasks.) “We want to change the way people call, we want to change the way people search and we want to change the way people navigate,” Mr. Arshad said. Samsung and Apple dominate the market, and some Asian manufacturers like Huawei and ZTE are selling low-cost smartphones and quickly gaining ground in economically disadvantaged markets. Tero Kuittinen, a telecom analyst at Alekstra, a mobile diagnostics firm, said it was bad timing for Google to be competing in the high end of the smartphone market. Mr. Kuittinen said that after Google bought Motorola, it killed its line of low-cost cellphones and “moved to high end, just when the high-end market ran out of gas.” “They’ve really lost momentum, they’ve lost distribution, and they’ve lost shelf space.” Google also has a track record of spotty hardware sales. The Chromebook Pixel, a touch-screen laptop that Google designed and manufactured, is a fancy piece of hardware, but the market for a $1,300 laptop with no ability to run desktop software is unclear. The company plans to offer a broad portfolio of products. Moto X is a high-end phone, but the company will introduce a lower-cost smartphone later this year, said Rick Osterloh, the company’s senior vice president of product management. Motorola may also contribute to Google’s efforts in making wearable computers like Google Glass, or eventually a smartwatch. Mr. Arshad said that the company’s X8 computing system was part of the company’s long-term goal to make mobile devices smarter and fit in the next generation of mobile devices. Now for the Moto X's most serious feat: the 16GB model's launching on all five US wireless operators at $199 (and with 50GB free Google Drive storage) later this summer without carrier customization. We repeat: without carrier customization. To be clear, that means the Moto X will be offered from AT&T, Verizon, T-Mobile, Sprint and US Cellular virtually unchanged, give or take a few pre-loaded apps. That's something Google hasn't been able to achieve with its Nexus line. As Ron put it, this widespread distribution is the result of Motorola's longstanding carrier relationships and a product emphasis on the average consumer.
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