Lenovo's Motorola unit preps Samsung assault with high-end Moto X

The Moto X Pure's biggest innovation is quality specs with a value price. Starting at $399 unlocked, the Moto X Pure will put the squeeze on Samsung's Galaxy line and other Android players.

Motorola's Moto X Pure Edition is likely to be Lenovo's lead attack dog as it prepares to take Android market share from Samsung and squeezes device prices lower.

On Tuesday, Motorola highlighted three Moto phones---Style (Pure in the U.S.), Play and G---and the theme was obvious: Quality phones, high-end specs and pure Android at value pricing.

In fact, the pricing may be the real innovation. For instance, Pure will start at $399 unlocked. At that price, bring your own device options for high end phones become more likely in the U.S. The Moto Pure is clearly aimed at Samsung's high-end Galaxy line with a 21 megapixel camera, removable battery, SD card support and charging that was touted as faster than Samsung's technology in a presentation.

Hands on with the new Moto X Style and Moto G | Motorola announces Moto X Style, Moto X Play, and Moto G | CNET: Moto X Pure/Style packs 21-megapixel camera into a larger, wildly customisable body (hands-on)

Adrienne Hayes, senior vice president of marketing at Motorola, preached best-in-class devices with value pricing. "We are devoted to our devices, but they don't love us back," she said.

As a result, Moto devices will revolve around five principles captured in this slide.

moto072815.png

Perhaps No. 5 is the most disruptive.

At Verizon, Samsung's Galaxy S6 edge is $699.99 at full price, or $299.99 with a two year contract. Most U.S. carriers are moving to device payment plans over 24 months. Samsung' Galaxy S6 is $100 cheaper at full price and with two-year contract.

Spec for spec, Motorola's higher end Moto X entry looks like a better deal. And as carriers in the U.S. move to installment plans, what a smartphone actually costs will matter.

If you're going to spend $299.99 for a Samsung Galaxy S6 edge and lock into a contract why wouldn't you simply spend the extra money and buy the Moto X Pure outright?

To date, buying an unlocked phone has been the domain of enthusiasts, but I'm willing to bet it'll become more common in the U.S. in the months to come. Add it up and there will be some fallout from the Moto X launch. Consider:

  • The unlocked price of $399 is going to force prices lower for other high-end phones. Motorola can now use Lenovo's supply chain and volume and will push prices lower.
  • Those lower prices on the high-end will allow down market players such as Xiaomi to move upstream. Xiaomi isn't in the U.S. yet, but will land here eventually.
  • If Samsung can't hold its high-end pricing, its profit margins will be squeezed by much more than Apple. Samsung is being squeezed from below by dozens of Android hardware vendors and can't trump Apple on the high-end. If high-end Android phones see deflation, Samsung will have real issues.
  • Should prices fall dramatically in the Android ecosystem bring your own device will be the norm and every wireless carrier will be commoditized to some degree. Moto X Pure allows you to hope between all four major U.S. wireless carriers.
  • Apple is unlikely to face price deflation, but if the entire smartphone market falls the company will have to at least offer some lower-priced iPhone option without subsidies.

Bottom line: Motorola's real innovation with the Moto X line is a reasonable price for quality specs.