The Moto X Is Great, but It's Not Enough

Remember when Google (NASDAQ: GOOGL  ) acquired Motorola? More than a year later, the online search king is finally putting the $12.5 billion acquisition to work with a Google-influenced smartphone: the Moto X. 

Moto X. Source: The official Motorola Blog.

Not surprisingly, Google is certainly aiming to compete with Apple's (NASDAQ: AAPL  ) iPhone and even Samsung's flagship Galaxy S4. Set to launch in late August or early September, the phone is available for $199 with a two-year contract.

The Moto X is packed with some great features, starting with design personalization that allows customers to choose from thousands of combinations. Highlights include up to 24 hours of battery life, a Snapdragon S4 Pro processor, and Touchless Control via Google Now integration.

Does this mean Google now has a phone that will overtake the iPhone? Probably not. Does this mean Google can now earn billions selling smartphones? Absolutely not.

Reality check
Though Google Glass, driverless cars, and Touchless Control on smartphones are all certainly interesting technologies, don't forget that Google doesn't make money selling products. It makes money selling ads. In Google's second-quarter results, Motorola Mobile accounted for just 7% of the company's total revenue. In fact, Motorola Mobile earned Google a non-GAAP operating loss of $49 million during the quarter.

Meanwhile, Google's business, excluding Motorola Mobile, generated $4.21 billion in non-GAAP operating income, or 32% of Google revenues.

And Apple certainly has no plans to let Google walk into the premium smartphone market without a fight. Last quarter, Apple sold 31.2 million iPhones, more than it has ever sold in any third quarter. During the quarter, Apple's iPhone business alone generated $18.15 billion in revenue.

Google's cash comes from ads
Though Google's Moto X may definitely help Google establish a stronger presence in the important smartphone market, it's not a large enough piece of the pie to move the needle for Google yet. For the time being, investors could eye the Moto X's success for the sake of curiosity, but there's no need to track the phone like Apple investors track iPhone sales.

Keep things in perspective. Google is still the worldwide leader in search, making money from a profitable ad network. Hardware is a still a very small portion of Google's business.

Interested in the next tech revolution? Then you'll need to learn about the radical technology shift some say forced the mighty Bill Gates into a premature retirement. Meanwhile, early in-the-know investors are already getting filthy rich off it, by quietly investing in the three companies that control its fortune-making future. You've probably heard of one of them, but you're probably never heard of the other two. To find out what they are, click here to watch this shocking video presentation!


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 06, 2013, at 2:36 PM, prginww wrote:

    So the Moto X doesn't wow you on the specs sheet. It's almost like a year behind spec wise with the top phones on the market like the One and S4. Yet the customization aspect makes the Moto X so intriguing. Is this the start of a whole customization craze? I'm hoping so. Hopefully the other companies see this and run with it. I'm hoping the next line of actual flagship devices have these customization options, customizable Galaxy S5 would be awesome. It's like the Nike ID shop for phones, what a great idea.

    Check out my blog about the Moto X being the start of the customization craze at...........

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2577857, ~/Articles/ArticleHandler.aspx, 9/26/2016 10:23:45 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,139.82 -121.63 -0.67%
S&P 500 2,153.77 -10.92 -0.50%
NASD 5,271.01 -34.74 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 10:07 AM
GOOGL $805.69 Down -9.27 -1.14%
Alphabet (A shares… CAPS Rating: *****
AAPL $113.21 Up +0.50 +0.44%
Apple CAPS Rating: ****