Google Goes Glam With Moto X

What Does Your Phone Say About You? New Device Is All About Individualization

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Brian Wallace was beaming when he stepped into a Motorola conference room on June 17. The company's VP-global brand and product marketing had just received word about the latest breakthrough for Moto X, the first smartphone Motorola developed since it was bought by Google last May for $12.5 billion.

But his excitement wasn't over some revolutionary functionality. Rather, he had learned Moto X's line of customizable backs would now include four kinds of real wood at launch. Issues with the wood backs interfering with phones' antennae had apparently been resolved.

It's out of character for Google to be so excited about a product whose allure is almost entirely aesthetic. Google has a reputation for aggressively pursuing the future of technology, costs be damned. It developed a self-driving car despite there being no immediate market for one. No one knows what its plans are for Google Glass. The company is fine creating things and waiting as long it takes for the rest of the world to catch up.

Moto X's positioning, however, is more fashion forward than bleeding edge.

Google is betting that going against the grain with Motorola -- by far its biggest acquisition ever -- is a winning strategy in the hyper-competitive smartphone market, and has assembled a serious team to execute it.

It's moved 70 Google employees to Motorola, many of them engineers. It hired the former director of the Defense Advanced Research Projects Agency, Regina Dugan, to head the company's new advanced technology and projects group. And it brought aboard 13-year mobile marketing veteran Mr. Wallace, who has spent time at Research in Motion and Samsung, where he helped position the Galaxy as a legitimate iPhone rival.

TECH FATIGUE

In developed markets like the U.S., "I think there's fatigue setting in. We've gotten into a pattern in [the smartphone] category of more of the same, year after year," Mr. Wallace said.

He may be onto something. HTC's One was released to rave reviews in April, but the company's second-quarter net income fell 83% from the same period a year earlier. Samsung released its feature-heavy Galaxy S4 that same month, but it too is expected to miss initial sales projections. Each phone impressed tech aficionados, but fell flat with U.S. consumers.

So rather than try to wow with technical specs, Moto X wants to be the best looker in the room.

"Everyone I work with, everyone I meet, all my friends and family, will always see my smartphone. It's an extension of who I am, but it's currently the most impersonal thing I own," he said. "What if you could design it from the ground up to be about you?"

Moto X customers will have their choice of 22 phone backs, seven accent colors, a white or black face plate, a white or black wall charger and 16 or 32 gigabytes of memory. There's not one Moto X design, but hundreds. The thinking is that people will put as much thought into designing their smartphones as they do their outfits.

Mr. Wallace believes this proposition can steal share from Apple and Samsung even while spending less on marketing. Marketing Moto X as en vogue will include ad pages in fashion magazines' fall editions and heavy Pinterest promotion. The layouts show Moto Xs complementing various looks.

While he declined to comment on Moto X's TV plans, Mr. Wallace said music would play a big part and that Motorola would align itself with popular electronic-dance-music artists.

Despite early reports that suggested Google would spend a massive $500 million to market the phone, "we're not going to be outspending Apple and Samsung, not by a long shot," Mr. Wallace said. "And honestly, that's OK. This isn't about money, it's not about budgets. This is about trying to outsmart and have a unique value proposition that will resonate."

Apple and Samsung spent more than $333 million and $407 million, respectively, on measured media for smartphones in the U.S. in 2012, according to Kantar.

MOONSHOTS

Analysts say an individually designed phone is intriguing, but they're skeptical. "It could be a differentiator for them; a step out from a sea of black and silver phones," NPD's Steve Baker said. "We don't know [if it will be effective] because no one's tried mass-customization before."

Forrester analyst Charles Golvin was slightly more optimistic about Motorola's chances, citing leftover brand equity from its Razr days. "Motorola is a well-established, recognized brand," he said. "It's not like Motorola is doing a complete reboot."

But this isn't about Motorola, it's about Google. Every Motorola employee who spoke with Ad Age echoed the company line about Motorola being "a Google company" with "a startup culture." Gone are the days of Motorola brass focusing on quarterly earnings, they said. Instead, the company is only looking at goals five years in the future.

Good thing -- because injecting more Google into Motorola products may take time. While the search giant may be brazen enough to challenge its Android partners HTC and Samsung, its first major smartphone under the Motorola brand is not technologically better. CNET said Moto X is an underdog in the smartphone market, but "at least has a shot at making a dent." Gizmodo loved it. The Verge said it wasn't "a game changer, but a compelling option."

Ms. Dugan's military-grade technology may be coming soon, though. Google increased Motorola's research and development expenses by $345 million from the first six months of 2012 to the first half of this year. More Motorola devices are expected to hit the market in the fall, and Mr. Wallace said Motorola is already working with Google's clandestine Google X lab on wearable computing devices.

"Larry [Page, Google CEO and co-founder,] always says, "Only take moonshots,'" Mr. Wallace said.

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