Motorola will be making a strong push with the Google-backed Android operating system, and the pricing of these handsets will be a big part of its strategy.
Manufacturers such as Samsung, Sony Ericsson, and HTC are also using the Linux-based operating system for handsets, but Motorola appears to be taking the most aggressive approach. While the smartphone market is rapidly growing, the majority of U.S. customers still use handsets classified as feature phones. Motorola said it can use Android to create devices that have the capabilities of smartphones but with the pricing of feature phones.
"Our core strategy really is to take Android as low down the feature phone tier as we possibly can, by bringing in smartphone features," sand Co-CEO Sanjay Jha in a conference call Thursday.
The company plans to have two Android smartphones out before the holiday season for two major U.S. carriers, one of which may be Sprint Nextel. Additionally, the handset maker said it will have multiple Android devices in the first quarter of 2010.
Motorola is jumping into a potentially crowded field, as Google said it expects up to 20 Android handsets to be released before the end of the year. Motorola is working with developers to potentially preload applications on its handsets in order to differentiate from the competition.
Motorola's low-cost strategy is not without risk, as the Linux-based mobile operating system does need some strong hardware to run optimally, and this could hurt Motorola's margins. Additionally, the initial price of the handset may not be as important to consumers as the need for a monthly data plan, which can cost up to $30 per month in addition to voice services.
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