The most amazing thing about two of the latest smartphones to emanate from the house of Google is neither their nifty array of tech tricks — though there are a few of those — nor the stylish customisation features available to customers.

Rather, in a world in which an expensive gold-clad iPhone snags status-conscious buyers, Google’s latest offerings are earning kudos for the modesty of their pricing.

Focus on developing world

The Moto G, which went on sale Wednesday, is priced at just $179 in the United States, compared to $549 for Apple’s “budget” model iPhone 5C.

Google’s flagship Nexus 5 is remarkably affordable compared to other high-end phones. It went on sale a couple of weeks ago starting at just $349; this is $300 less than the cheapest Apple 5S, which many aficionados would say has less impressive features.

Google bought Motorola last year for $11.9 billion, largely to give the web giant a phone-maker that could aggressively set standards for the future of Android phones. With Moto G, its message is that a huge wave of smartphone purchasers in the developing world is becoming more important than the saturated markets of advanced economies.

A right, not a privilege

“We believe with Moto G we’ve given people around the world a better choice,” Motorola chief executive Dennis Woodside told Computerworld.

He noted that 500 million people globally are expected to invest in cheaper smartphones at prices of around $200 each in the next year.

While that represents a market of a staggering $100 billion worth of phones, it’s also the right thing to do, Motorola insists.

“Full access to the Internet is a right and not a privilege,” said Charlie Tritschler, Moto G product manager.

Mass market the driving force

The trend is already well under way, thanks largely to Google’s championing of Android as a free operating system that any manufacturer can install on their handset.

That masterstroke has given Google the same control over mobile devices as Microsoft had over PCs. According to a report this week by research firm IDC, Android phones now account for more than 80 per cent of the global smartphone market, while the iPhone’s portion shrank to 12.9 per cent from 14.4 per cent a year earlier.

“It is the mass market that is driving the entire market forward,” said Ramon Llamas, an IDC researcher.

Smartphones everywhere

With a free OS and ever-cheaper electronics, smartphones now account for the majority of all mobile phones sold around the world, according to a market report issued Monday by Ericsson. That milestone, reached in the last quarter, was fuelled by the growth of entry-level models in markets such as China and India, the study found.

Smartphone sales will continue to explode, tripling by the end of the decade to a point where there will be 5.6 billion smartphone subscriptions. In other words more than two out of every three people of a projected 2020 global population of 7.6 billion will have a smartphone.

Competition galore

Samsung is another chief driver of the trend, accounting for almost 40 per cent of all Android devices shipped. But it is facing stiffer competition — and not only from the Moto G.

Windows phones are finally gaining traction, with sales more than doubling in the last quarter thanks to models such as Nokia’s Lumia 520 — which can now be bought without a contract for $100.

Numerous Chinese companies are producing low-cost devices with advanced features. Xiaomi, which recently poached Google executive Hugo Barra, has released the $150 Hongmi, which boasts a quad-core CPU, a large screen and high megapixel rear camera.

If there’s one thing analysts agree on it’s that prices will continue to fall.

“The second wave of smartphone adopters is now starting,” said IDC analyst Francisco Jeronimo. “This wave is characterised by consumers looking to get their first smartphone at the cheapest price they find.”

(This article was published on November 14, 2013)
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