Will the Moto G Lead the Cheap Smartphone Revolution?

While the sales figures for the $179 contract-free Moto G have yet to come in, one thing's apparent regardless of the numbers for Motorola: this feature-rich smartphone proves consumers can have current tech at a reasonable price. Some might view this as the decline of the smartphone but I say that the smartphone is just entering into the next stage of its life as a piece of relevant technology. 

Let's talk about where the smartphone has been for the past several years. The first stage could be informally called, "Ooh, shiny!" You know, that moment when a piece of technology hits the market that is so new, so unlike anything that's come before it, that it changes how we think? Think back. Way back. 

Like when the television was first released to consumers. It was a big ticket item priced at $189, which would be nearly $3,100 today. The same thing happened when the first personal computer was made available in 1974. It was a build-it-yourself kit and its $397 price tag ($1,973 today) alienated the majority of consumers. It's the Tesla Model S. Yes, it's rolling out at the high end but you know the price is going to come down as the tech is more widely accepted. 

Back to smartphones. You probably remember where you were when Steve Jobs took the stage to announce Apple's (NASDAQ: AAPL  ) iPhone. It was unlike anything else on the market and led the charge in making cell phones so much more than just things you chat on. Since Jobs donned the black turtleneck, there have been numerous smartphones to hit the market, from Samsung to LG to Motorola. They've been priced high and they've been priced low. But up until now, the attempts at budget smartphones have been lackluster. Thanks to the support from parent company Google (NASDAQ: GOOGL  ) , the Moto G is really the first time: (a) the price has actually been reasonable for a contract-free deal, and (b) the phone itself hasn't had its feature set slashed to maintain a low price point. 

Past the shiny

With that being said, the smartphone no longer qualifies for the "Ooh, shiny," stage. Instead, it's in the "old hat," stage. I'm not saying it's boring or irrelevant. I just mean it's an accepted form of technology like the television. And with that level of acceptance comes an obligatory drop in price that makes what was once exclusive a much more accessible and widely available piece of technology. 

Here's another way to think of it: when the tipping point on a tech product shifts from want to need, the price tag drops. It's a pattern that's been repeated time and time again. 

But what does this mean for the players staying at the higher price point? Apple, Samsung, and the like don't seem to be lowering their prices any. Apple's idea of a "budget" phone is the iPhone 5C, which costs $549 without a contract. The iPhone 5S costs $649 and the Samsung Galaxy S4 is priced at $600. And these manufacturers are not alone. It's a smartphone landscape that leaves the majority of those looking for a contract-less phone out in the cold. It leaves most budget-conscious tech lovers wondering if they'll ever get their hands on an affordable smartphone, without a contract, that actually does, you know, cool stuff

After the TV shifted from shiny to old hat status, the price did eventually come down. However, technological innovation still affects the television market, justifying continued high prices on the high end of the market. The same goes for the personal computer.

But for the average consumer, a television or computer is within reach financially. And that's precisely what the smartphone market had been missing. Up until now, your choice was between the super high end, hundreds of dollars model and the super low end, looks kind of like a Tamagotchi model. There wasn't much of a middle ground in terms of price or function. The Moto G is shaping up to fill that void quite nicely. Hopefully other manufacturers will recognize market demand and follow suit. 

%sfr%


Read/Post Comments (0) | Recommend This Article (2)

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.

Be the first one to comment on this article.

DocumentId: 2745167, ~/Articles/ArticleHandler.aspx, 7/31/2014 1:50:48 PM

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...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement