Motorola, the struggling telecommunications company that was recently purchased by Google, believes low-cost smartphones are just the thing to spark its business. Their new phone, the Moto G, was released this past Wednesday. It comes with a $179 price tag, which is roughly one third the cost of Apple’s iPhone 5C.

Although it doesn’t possess all the capabilities of industry-leading smartphones from Samsung or Apple, it’s technology is ahead of the low-cost smartphones which it is directly competing with.

Motorola’s new Moto G

Having reported a big operating loss in the last quarter, Motorola is looking for a change in direction. With this new phone, Motorola’s strategy is cost-leadership. The company believes there is a sizable market for low-cost smartphones – roughly 500 million consumers who are interested in a smartphone with the Moto G’s price tag. Motorola sees this as an opportunity to claim market value from competitors, whose products are outdated and unreliable. By targeting their product to budget consumers in North America, as well as consumers in the developing world, Motorola believes it can market its product efficiently while outperforming its low-cost competitors, as well as reaching demographics which are not dominated by Apple and Samsung.