With the launch of Moto G, a fully functional smartphone priced at $179 unsubsidized, Google is finally doing something disruptive with its decision to become a hardware player.
Targeting its new device firmly at high growth markets like Brazil, it is aggressively doing what Apple fumbled with the iPhone 5C – producing a handset that is attractive and affordable enough to drive uptake of the mobile web in emerging economies, but which still leaves room for consumers to move up to higher end models in future.
Google becomes a proper device vendor at last
This shows Google finally getting to grips with its hardware/software strategy. We still believe that to be a mistake. The search giant was manoeuvered into acquiring Motorola Mobility because it was desperate for patents and the handset maker's CEO, Sanjay Jha, was too clever to wreck his firm by allowing the IPR to go alone.
Rather than selling on the device business, Google saw a chance to emulate Apple with an integrated offering for Android, in the process setting up all kinds of conflicts of interest with its handset partners – some, notably Samsung, far more powerful than Motorola – and with its own business models, relying as they do on a ubiquitous presence for Google web services.
Those conflicts have been swept under the carpet rather than resolved – until now. Google has appeared to be placating Android OEMs by excluding Motorola from its other device initiative, Nexus, and it has come across as though embarrassed by its new child, downplaying previous Motorola launches under its wing and insisting the unit is entirely autonomous. The overall impression has been unconvincing – the first thing Google did on acquiring Motorola Mobility was to install one of its own long-time executives as CEO – and apologetic.
Now it seems that Google has accepted that, if it wants to drive its own Android experience and revenues by selling its own hardware, it cannot have it both ways. Yes, Nexus will continue as a program to work with partners and tap into their innovations and brands, but that has always been a rather experimental initiative, showcasing the latest Android developments to developers and power users, and testing new approaches – like, notoriously, the direct-to-consumer sales model of the first Nexus handsets – without too much risk.