Comm 101

It was only two years ago when the demise of Motorola occurred and Google swooped in with an astonishing buyout offer of $12.5 billion. Now under Google, Motorola has recently released a low-cost smartphone. The Moto G, as the phone is called, is priced just under $180, making it readily affordable for customers in developing countries. By introducing this new phone, Google is creating a new revenue stream, with specific focus in the South American market segment, by using a low-cost focus strategy. By utilizing Motorola, Google can continue to sell it’s higher priced phones through the Google brand, which will preserve its brand reputation, while more affordable phones will be sold under the Motorola brand. Through this strategy, Google will reap full benefits of the profits gained from both brands as they each target a different price range. Despite a lower price, the Moto G will also offer Playstore (Google’s app store), which makes it an appealing point of parity to Google’s existing smartphones. Eventually, Google hopes to market the phone to the Chinese market, but it must find a way to overcome political entry barriers, which can be seen by doing a CPEST for Google, as China does not currently allow the use of Playstore.