Home Blog 2019 Will The Desire To Stand Out Help Motorola Drive Sales?
Nov 21, 2019

The New Foldable Motorola razr Creates a Conflict Between the Heart and Wallet

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Last week Motorola revealed its much-awaited foldable smartphone, built on the foundations of its once-iconic RAZR V3 clamshell design. As one of the lucky few to have hands-on time with the device prior to launch, two words sum up my experience: painful excitement.

Since the early 90s, I’ve been checking out what devices other people were carrying, always wondering: was I missing something? But this mentality has faded over the years, as most smartphones look the same. That is not a statement one can make about the new RAZR. It’s been a long time since I was genuinely excited about a new phone, and even longer since I thought: “This is it; I want to buy this.” Indeed, the last time was probably when the iPhone launched, revolutionizing the smartphone market.

Fifteen years ago when Motorola launched its iconic RAZR V3 at the outrageous price of $499 (plus tax) – in those days, no phone cost more than $200 – we ended up waiting for the price to drop so we could buy into the coolest icon of mobility.

I must say, a couple of weeks ago when holding the new RAZR, I felt the same way. What’s truly impressive is Motorola’s ability to nail the foldable design with such precision. The moving parts in the complex hinge mechanism allow the folding 6.2-inch POLED display to slide into the bottom chin of the phone that houses the antennas. This sliding mechanism gives the screen the flexibility for a zero-gap closure, unlike other folding attempts that have typically resulted in an awkward gap. Motorola also took a different approach to the folding challenge: rather than looking to build a big smartphone that could unfold into a small tablet, it re-imagined what a smartphone could be by making it half the size.

But we cannot avoid the compromises: simply put, the RAZR specs fall short of any mid-tier phone in the market because of the limited space for the latest tech. The phone has two small batteries that Motorola claims will last a full day, but to do so Motorola had to opt for a lower tier QCOM chipset that is less power-hungry than today’s Snapdragon 800 series chipsets. Further, unlike mid-tier – and even low-end – phones that boast multiple camera lenses, the RAZR has just one, although Motorola believes that its enhanced AI computations will offset this limitation. And of course, it goes without saying that the phone is not a 5G device. And yet, 2020 will be the year of 5G, with all the carriers pushing hard to sell 5G devices.

Despite these shortcomings the desire to own one stems from the want to stand out from the crowd. And so, we come back to my initial description: painful excitement. I want the new device, but also struggle to justify the cost… just like when I first saw the old RAZR V3 all those years ago. This phone may have mid-tier specs, but the price is a whopping $1,499, or $62 per month on Verizon’s installment plan. As such, Motorola is in relatively uncharted waters, hoping that the exclusivity and uniqueness of the device will drive sales. It certainly worked the first time around, but the path to success is murkier this time.

According to NPD’s new Mobile Phone Tracking*, which uses advertising technology to capture active devices, just under 10% of U.S. consumers are buying smartphones over $1,000. And these consumers, especially those on the Android side, have high expectations for what their expensive phones can do in terms of productivity and rich multimedia experiences. Given some of the RAZR’s limitations, Motorola will instead need to build a new audience that’s prepared to compromise on some functionality in return for uniqueness. But it’s even tougher than that: when the RAZR V3 emerged, phone manufacturers could only dream of building an ecosystem to keep their customers loyal to their brand. But today, the top two ecosystems – Android and iOS – have loyal followings. And many of the customers who would previously have owned a RAZR are firmly in the iOS camp. While some may be drawn to the new phone… some will not.

But despite all of the challenges, this foldable RAZR is still a big win for Motorola. The folding mechanism leaves the leading OEMs in the dust and puts Motorola back on the map as premium device maker. Motorola has spent the last several years trying to stay in the black with a competitively priced low-tier device portfolio and managed to earn market share in various global regions including the ultra-competitive U.S. market at a time most other OEMs experienced declines in sales volumes. With ever-increasing competition at the low-end of the smartphone market, Motorola needed to move up and the RAZR does that. We should also assume that the U.S. distribution partner Verizon Wireless will aggressively promote the RAZR and the Motorola brand in return for securing “lifelong” exclusivity on the RAZR franchise.

The key will be if Motorola can tap into our desire for uniqueness – or even nostalgia – to such an extent that it outweighs the monetary concerns. It is possible, with the right social influencer backing, and if Motorola can make that happen, it will unleash a new era of innovation and design creativity into the smartphone world.

 

*The NPD Group, Inc., Mobile Phone Tracking, 12 Months Ending September 2019.

NPD’s Mobile Phone Tracking leverages advertising technology to track devices as they interact with the North American ad-server network. This along with NPD’s unique data assets provides insight into market sizing, attribute tracking and regional trends.



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