Motorola's next flagship smartphone, the Moto X Pure Edition, will debut on September 3. Those who wish to purchase one must do so through Amazon, Best Buy, or Motorola's own website -- Motorola will not sell the Moto X Pure Edition through any carrier.
This stands in sharp contrast to its Android rival Samsung (NASDAQOTH:SSNLF). In the U.S., the Korean tech giant does not sell unlocked Galaxy handsets -- all of its phones are designed for particular carriers.. Every Samsung phone sold in the U.S. -- even those sold through third-party retailers -- is branded by a single wireless carrier.
Motorola has been much less successful than Samsung to date, but its strategy hints at a changing U.S. wireless landscape.
Unlocked and ready work to with any carrier
It's often a difficult and confusing process to bring a handset from one carrier to another. Differences in technologies and frequency banding can make it an impossibility. In the U.S., Samsung sells four versions of its Galaxy S6 -- one designed to work with each of the four major networks. Some of these versions are compatible with other networks (the T-Mobile variant, for example, can work on AT&T) but a difference in radio banding can lead to sub-par performance. Others are simply incompatible -- the AT&T variant lacks the CDMA technology used by Verizon's (NYSE:VZ) network.
Motorola's Moto X Pure edition, however, is able to work with all four major carriers. The phone's lone model supports both GSM and CDMA, HSPA+ and 14 different LTE bands. By simply changing the SIM card, Moto X Pure edition owners will be able to change their carrier whenever they please.
The death of subsidies
At the moment, there is no version of Samsung's Galaxy S6 that offers this capability. This wasn't much of an issue in recent years, as most smartphones were sold on standard, two-year contracts. When a contract expired, consumers would just sign a new contract and get a new phone.
But the way consumers are purchasing smartphones is changing. Earlier this month, Verizon announced that it would be doing away with contracts altogether for new customers. Now, new Verizon customers must purchase their phones outright, pay for them in installments, or bring over compatible devices they've purchased elsewhere (like the new Moto X). They can cancel their service at any time, and if their handset supports it, use their device on a different network.
Under this system, an unlocked phone with support for a wide variety of networks is much more attractive, as a handset lacking support for other carriers limits its owner's choices.
Whether this will lead customers to choose the new Moto X over a competing Samsung device remains to be seen. Certainly, Motorola's brand isn't as strong as Samsung's -- even as Samsung's mobile profit has plunged, its share of the U.S. Android smartphone market has strengthened. According to Kantar Worldpanel, in the second quarter, Samsung and LG combined for 78% of all U.S. Android sales.
Apple seems to be aware of this shift. The Cupertino tech giant began selling a fully unlocked version of the iPhone 6 earlier this year. Like the new Moto X, this version of the iPhone is compatible with all the major U.S. carriers, but as the company notes on its website, "purchasing an unlocked iPhone means you will not qualify for the lower... price associated with... a carrier installment plan." Buying an unlocked iPhone 6 means spending $649 or more up front -- a tall order for many.
A niche offering, or the future of the wireless industry?
The Moto X Pure edition, in contrast, starts at a far more palatable $399 -- but it may still be too expensive. In the past, T-Mobile's marketing for the Galaxy S6 has consistently emphasized "$0 down" for its installment plans -- clearly, customers are not eager to part with several hundred dollars upfront. At the same time, the move away from contracts is still somewhat in its infancy. In fact, Verizon customers could still sign contracts through Wednesday.
The new Moto X Pure is a different phone for a different era: a radical shift for a company that has been selling its Android flagships through carriers since 2009. But if it succeeds, it could help fuel a new trend -- one that could change the U.S. wireless industry forever.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool both recommends and owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.