Motorola is quietly thriving in the US, but it needs a real flagship to get to the next level

This article may contain personal views and opinion from the author.
Motorola is quietly thriving in the US, but it needs a real flagship to get to the next level
The excellent Moto G7 lineup is primarily responsible for the brand's recent revival

As global smartphone shipments have been steadily declining for the past couple of years, it's proven difficult for most mobile industry veterans to maintain a healthy growth pace and hefty profit margins with consumers constantly demanding more value for less money. But apart from the likes of Huawei and Xiaomi, which impressively managed to defy all trends and boost their sales numbers amid this unprecedented stagnation, another major brand made significant albeit not as remarkable strides.

That's probably why Motorola's decent progress of late didn't quite catch the attention of so many market analysts and tech pundits. But this writer noticed it, starting back in February, when Lenovo's Mobile Business Group reported its first quarterly profit in almost five years. For those who've been living under a rock this past decade, Motorola Mobility was acquired by Google for $12.5 billion in 2012, then offloaded to Lenovo just two years later for a fraction of that sum.

While the $2.9 billion deal seemed like an incredible bargain at first, Lenovo struggled to capitalize on one of the oldest, most respected brands in the history of mobile phones for years.

The beginning of a (potentially) beautiful resurgence

Before we go any further, it's important to highlight Lenovo's mobile division isn't exactly swimming in money all of a sudden. Because the Chinese tech giant never detailed the profit scores of its "Mobile Business Group" during the final three months of 2018 and first quarter of 2019, we're guessing those are still fairly modest. But small profits (for two consecutive quarters) sure beat the massive losses reported over the last few years, as Lenovo tried a number of different strategies, reorganizing its vast product portfolio more than once before deciding on focus on a handful of Asian markets with own-brand devices and primarily aiming Moto handsets at North and Latin American audiences.

Widely beloved in the US since the good old Razr days, Motorola essentially doubled its regional market share between Q1 2018 and Q1 2019, according to the Counterpoint Research records. The latest preliminary Kantar report suggests the brand had a great second quarter as well, and although its 8 percent slice of the pie doesn't feel as impressive as, say, the 145 million phones it sold around the world back in 2005, it's definitely something that could one day lead to... something bigger.

But while this spectacular promising comeback would have never been possible without the increasingly popular mid-range Moto G series and the even humbler Moto E family, "Lenovorola" has to step things up if it wants to be taken seriously as a potential challenger for the global podium. Speaking of podiums, it's interesting to point out that Motorola is inching closer to LG's bronze medal position in the US while ranking a very distant seventh in worldwide smartphone shipments as of Q1 2019.

No high-end presence, no long-term growth prospects

Quick, what do Samsung, Huawei, and Apple have in common? Aside from a penchant for "borrowing" each other's best ideas, designs, and features, that is. Yup, we're thinking about the best, most popular high-end handsets around. Granted, Huawei's incredible rise through the ranks these last few years is owed in large part to the company's excellent low-cost products. But without blockbusters like the P20 and Mate 20 lineups, overtaking Apple would still be a pipe dream. Ditto for Samsung and the Galaxy S10 family, as well as previous members of the super-premium Galaxy S and Note families.

High-end devices don't just sell better than low-enders and mid-rangers, also generating much higher profits that sometimes allow humbler products to be sold at a loss. Unfortunately for Lenovo, the Moto Z lineup hasn't been able to catch on quite at the same level as the G series. Need proof? According to Counterpoint Research, Motorola is ranked outside the top five vendors in the global premium segment, behind both OnePlus and Google.

OnePlus and Google are ahead of Motorola when it comes to US sales of "premium" smartphones as well, which is... not great. After all, OnePlus barely made its regional debut last year. On a single carrier, too. Clearly, the Moto Z3 was a flop, while the recently released Z4 doesn't feel very premium, packing a Snapdragon 675 processor. On the bright side, there's always the Z4 Force to look forward to, right? Well, apparently not, which means the company is giving up on the high-end segment entirely, not even having a US contender for the likes of the Galaxy S10e and iPhone XR in the works.

That seems like a big mistake, essentially relegating the brand to second-tier status. There's obviously nothing inherently wrong with focusing squarely on the low and mid-end categories, especially when doing it with awesome devices like the Moto G7 and G7 Power. But these are also inevitably low-margin segments, unlikely to generate the kind of long-term growth a brand associated with the cell phone's invention should be pursuing. Instead of thinking big picture and dreaming big, Motorola appears to be settling for marginal, short-term gains.

Unless the foldable Razr is real, more powerful than recently rumored, and closer to a commercial release than currently believed, in which case I take it all back.



1. Sparkxster

Posts: 1240; Member since: Mar 31, 2017

Moto definitely needs a high end phone in the US but after the way they handled updating the Z2 force they need to show that they are serious about software updates. A good start would be to sell the Lenovo phones in the US like the Lenovo Z6 Pro.

2. User123456789

Posts: 1084; Member since: Feb 22, 2019

If you complain about updates, then you should not ask for Lenovo devices. Even worse. OnePlus is the only chinese that brings fast updates. I dont like the brand, but they take updates seriously.

3. logicsdude

Posts: 85; Member since: Jun 25, 2014

Or maybe, people are realizing that the vast majority of people don't need a flagship, and so they shouldn't bother dropping a grand on one of those when a budget or mid-range phone is more than enough for their needs. Their growth has come without a flagship, and pixel 3a and iPhone Xr both show that people are being more budget conscious.

4. gsengillo

Posts: 45; Member since: Sep 05, 2010

they need a z4 force with a 855+

5. VariableCheapskate

Posts: 185; Member since: May 29, 2019

They don't need to release a phone no one wants to trade a gaming PC for. You don't speak for the average consumer, as most tech journalists never do.

6. miketer

Posts: 535; Member since: Apr 02, 2015

Samsung got it's S line. Of course, the Note line can be called as iconic in the mobile space. Huawei got it's Mate line. LG got it's V line, but yes, their commitments to updates has cost them. Motorola has got none. The premium line shows what the manufacturer can do, earns recognition and space in the mobile industry. Then the mid range from the same manufacturer helps selling good quantities. There are many manufacturers who have a decent line up of good mid rangers, but no one has got the guts to spend money and try them out coz these manufacturers are not in the human psyche or radar due to the absence of a premium line. They're not looked upon as a major player, even if they're good enough. Motorola faces the same situation. I think a strong mid-range line up and the iconic name 'Motorola' is what's driving them....again, the name is iconic only in the States, because of their fantastic history in telecommunications...who can forget the first mobile call. If they concentrate on the Razr line as the 'premium range', bringing in features that stands out, not necessarily as 'the new sexy' as Alan Friedman says (hate such over the top headlines, ), an sure Motorola Will have their space in the mobile world globally, not just in States.

8. stephenvictor

Posts: 2; Member since: Apr 28, 2018

Flagships haven’t worked well for Moto in YEARS. Their appeal is mid tier and that’s just fine. Moto KNOWS THIS. It’s okay not to have a yet another flagship, especially when most don’t give a damn about it. Good on Moto for sticking to what works.

9. Whitedot

Posts: 857; Member since: Sep 26, 2017

And it's dead in Europe mainly for the reason Huawei, Honor and Xiaomi enjoy selling their devices freelly there. If only carriers would be selling these Chinese brands in US Moto story would be over.

10. Mrmark

Posts: 407; Member since: Jan 26, 2013

I think they are doing a good job hiring the right market with their phone releases. It would be cool if they made a limited edition maybe 1000 phones made high end smartphone just for advertising and hype purpose that work with the Moto mods but that's it .

12. ullokey

Posts: 182; Member since: Jul 28, 2015

What is your obsession with flagship devices? Most of the people do not need and do not use a flagship device. Motorola seems to have got it right here by selling mid range and low end devices

13. highwaysnobbery

Posts: 55; Member since: Feb 19, 2013

Maybe team up with Google and they can help save each other? Again...

14. Venom

Posts: 3778; Member since: Dec 14, 2017

I wish Google never sold them. That was a big mistake and now Lenovo is killing what little image they have left. Motorola is a mere shell of their former selves.

16. Wildheartmoto

Posts: 3; Member since: Jul 16, 2019

My Moto G6 Play got the 9.0 Android Pie upgrade in mid July 2019. So, Lenovo/Motorola does offer Android software updates. I love my G6 Play phone. It feels and runs more premium than I ever expected. And the Pie upgrade hasn't slowed down the phone at all. I like how Moto's have almost stock Android OS. I absolutely love owning a decent smartphone instead of making monthly payments for a $500-$1,000 phone. Been there. Done that. Waste of money IMO. Moto is smart aiming at the Mid-range and low-end market, offering great phones for those prices.

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