Does the Google Moto G Threaten Microsoft Lumia?

Chris Lau, Kapitall: Google is shaking up the budget smartphone market with the Moto G. How will competitors react?

Google’s (GOOG) Motorola unit dramatically shifted the landscape for budget smartphones when it released the Moto G. Priced between $179 and $199, the Moto G will likely be a cause of worry for Apple (AAPL) and Microsoft (MSFT)

Click on the interactive charts to view stock prices over time. 

Apple’s iPhone 5C, which is an entry level premium device for consumers, is priced sharply higher than the Moto G. Lumia 520 (priced between $69 – $109) still competes effectively on price, but other Lumia variants offer far less than the Moto G. The threat of the Moto G for budget smartphone makers looks very real.

Specifications
  • The Moto G is either $179 (8GB) or $199 (16GB).
  • The smartphone has a screen size of 4.5 inches, 
  • It features 1GB RAM
  • Runs on Qualcomm’s (QCOM) 1.2GHz Snapdragon 400. 

The Lumia 620’s specifications pale in comparison, offering half as much RAM, a weaker processor, and a mid-range WVGA screen. Microsoft does have an edge with the Windows Phone operating system, since it requires less memory and does not benefit as much as Android by having more processing cores.

iPhone 5C missed the mark

Sales for the iPhone 5S may have picked up on Black Friday, but the 5C could have been a device that sold even better had the price been lower. Apple had the opportunity to market a starter phone for consumers on a tight budget. 

Motorola now earns the title of having a very usable, starter phone with respectable specifications and an even more impressive low starting price.

Conclusion

​But budget-conscious consumers looking for something extra now have more choices. The Moto G looks competitively positioned to take on the iPhone 5C and the mid-range Lumia smartphones. So how will Apple and Microsoft respond?

 

( Written by Chris Lau. All data sourced from Zacks Investment Research.)

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