Analysts predict that Motorola's new lineup of smart phones equipped with the Google Android operating system will be targeting the lower-end of the Smartphone, rather than taking Apple's iPhone, Palm's Pre, and Research In Motion head on.
According to BusinessWeek, Motorola will be shifting its approach to the market, not trying to develop a one hit device, like the Razr or the old school startac, but rather a solid portfolio of decent devices, “I don’t expect these phones to be razzle-dazzle,” said Michael Mahoney, senior managing director at Falcon Point Capital. Motorola declined to comment. Personally, I think in order for the overall good of the android platform, we need a homerun device to compete with the iPhone and Pre. If the device is well made, (sorry HTC, but the G1 was awful), then consumers would like it, demand would increase, developers would be incentivized to create applications on the platform, creating that snowball effect.
Entering into lower end smartphone market could a good niche as no one seems to be addressing that segment, and many users are looking to upgrade their traditional feature phones. Margins could still remain relatively high because Android is a free operating system. However, if
Even with the lower end market, the devices would still sell for several hundred dollars, $300 before carrier subsidies, and another for $500, says Barclays Capital analyst Jeff Kvaal. Motorola’s average handset selling price to $147 in the fourth quarter, up from $123 in the first quarter, Kvaal said. Next year, it could go higher. The goal of course is to increase the company’s overall market share. If it sees just mild success, it’s overall unit volume should increase by 20 percent to 70 million units shipped in 2010, Kvaal said, which will be a step in the right direction.
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