Motorola cell phone cheaper recovery

Fan of Ironman-type races involving 3.86 km swim, cycle and run 180 other 42.2 miles of a marathon, the Chief Executive of Motorola Mobile, American Dennis Woodside, tries to maintain a daily training routine.
The idea is to keep in shape to conquer increasingly better marks on exams, which are held for an entire day and have maximum time for each step. But the preparation of Woodside is also useful to face a challenge even more intense: replace the manufacturer of Motorola phones in the list of companies with relevance of an industry that today runs to reach Apple and Samsung.
The first step in that dispute was given in September, with the release of the Moto X, the first phone designed by the company after the acquisition by Google, completed in may 2012. Now, the company initiates the second stage, when launching the Bike G, a simpler and cheaper version of the first device. In the us, the Bike G will be sold at $ 180, without a contract with a tele; is less than half the price of Moto X.
"We are seeking growth and cheap smartphones market has a lot of potential. It is estimated that there will be a market of 500 million units in the world next year, "said the Executive. Woodside came to Brazil this week to launch the appliance. The country will be one of the first to receive the model 30.
The phone will be sold in Brazil in four versions with prices from $ 649 to $ 999. According to research firm Nielsen, the average price of smartphones in the country amounted to r $ 650 in the first half.
The cheapest phones market has attracted manufacturers due to the saturation of more mature markets. In the us, for example, sales of smartphones already account for 50% of the total. The output to maintain the growth is to develop cheaper devices accessible to residents of emerging countries, where the use of advanced equipment is less. In Brazil, the rate of usage is 30%.
Lower prices, however, represent smaller profit margins. To balance this, the manufacturers choose to make devices with simpler configurations, which often do not exhibit high resolution video, or do not run some applications.
With the Moto G, Motorola adopted a different stance and included advanced features such as front-facing camera for videoconferencing and a eight-core processor – present in appliances in the range of $ 1.5 million. Even with a higher cost, Woodside says that Motorola will have a financial return with the Bike G.
According to the Executive, the "magic" for that to happen involved measures such as reducing the number of components used in assembling the Bike G and negotiate prices with suppliers. With the chipmaker Qualcomm, the company was able to more attractive values to commit to buying a higher volume of new components. "It's interesting for suppliers to achieve a high volume of sales," he said.
The balance of the costs is a fundamental aspect for Motorola in its new phase. Since it became part of Google, the manufacturer has weighed on the company's balance sheet. In the quarter ended Sept. 30, Motorola had a loss of $ 248 million, 30 percent more than recorded in the same period last year. The result was a 33% reduction in sales, which were $ 1.18 billion. The goal is to reduce this dependence on Google as soon as possible. "We want sales volume. And the more revenue climb, the better the final result, "he said.
Investment in cheaper appliances already brought trouble for Motorola. When the market was walking to more advanced models in 2006, the company bet on simpler phones, in search of sales volume gains. The strategy was aborted in 2008, when he decided to focus only on smartphones with Google's Android operating system.
The strategy of Woodside, the idea is to balance the offer in different price ranges, with the increase in Motorola's product line in 2014. The geographic expansion will also be important. Despite being a known brand globally in recent years Motorola had been concentrating its forces in markets that had a more significant presence, such as Latin America. "It's the phone that carriers want to. We have the opportunity to reach markets that were not investing in recent years, as Europe and Asia, "Woodside said, referring to the Bike G.
According to research firm Strategy Analytics, Motorola represented less than 2% of smartphone sales worldwide in the third quarter.