Verizon Wireless needed a refreshed portfolio of converged devices that could deliver revenue-generating services into consumers’ hands. Motorola Inc. needed to boost its smartphone offerings, its margins and its overall fortunes.
The two parties’ interests thus dovetailed over the new Q Music 9m-a version of Moto’s updated Q family of products-launched last week at Verizon Wireless for $200 after a mail-in rebate and two-year contract.
The launch stands at the head of an expected procession of portfolio-refreshing launches at the toptier carriers as the industry heads into the crucial, holiday-based retail season.
New Q
Verizon Wireless gets the Q Music 9m model in its signature, black-and-red motif, with a Verizon Wireless-branded screen-within-a-homescreen for ease of navigation to its features and personalization options. Motorola touted and at least one analyst confirmed that the company had vastly improved the tactile quality of its QWERTY keypad for the new Q, which packs a range of music and messaging formats, Microsoft Corp.’s Windows Mobile 6 and other features.
The market focus of the new Q has morphed somewhat from its original aim last year at “soccer moms.” That category hasn’t changed, according to Moto spokesman Paul Alfieri, but the notion has been semantically expanded to “home CEOs”-perhaps a candidate for the catchphrase du jour.
Still, Moto representatives presenting the device on the road last week said that market research on original Q buyers led the device maker and Verizon Wireless to target the Q Music 9m at the 18-to 29-year-old, music-and-messaging-crazy crowd. If not exactly “home CEOs,” the target demographic is broadly representative of a sizeable market, in Verizon Wireless’ view.
“Mobile music is now mainstream,” said Brenda Rainey, Verizon Wireless spokeswoman. “And so is the need for messaging and personal information management.”
Pressure from iPhone?
Raney said that Verizon Wireless will further refresh its portfolio this fall in anticipation of the holiday season and that it had indeed pressed Motorola to make the Q Music 9m available in time for last week’s launch. Has rival AT&T Mobility’s launch of the iPhone pressured Verizon Wireless to refresh or expand its smartphone lineup?
“The entrant of a new vendor in the market will not affect our strategy,” Raney said. “There will be a segment of the population that will pay for a feature-rich and style-conscious device, but that doesn’t replace the market for moderately priced phones.”
Platform to build margins
Brian Stech, director of global marketing and business development for Motorola’s productivity devices, said that his company will use the Q platform to create individual products for its top carrier customers in the United States and globally. The platform manufacturing approach-common to top handset vendors-allows better cost management, Stech said, which is key to driving healthy margins and, therefore, fueling Motorola’s financial recovery and rebound in market share.
In Verizon Wireless’ case, the Q is provided with features-and a marketing slant-toward music-and-messaging; other carriers will soon see Qs fashioned to meet their own goals, Stech said.
“No one phone does all things for all consumers,” Stech said, perhaps reflecting Motorola’s new strategy of building and maintaining a deep portfolio of solid-selling devices that doesn’t depend on a runaway hit such as the Razr handset.
As for the Q Music 9m’s ability to bring Motorola those much-needed margins and a foothold in the small-but-growing smartphone space, Stech said that “rich experiences mean better margins” and said that Verizon Wireless determined the retail price of Motorola’s products.
On Motorola’s renewed strategy for its handset business, Stech offered a glimpse of the future.
“You’ll see us present different offerings for different market segments in the context of our competition,” Stech said. “We’re picking our battles.”
Stech touted the Q Music 9m’s keypad as “best in class” and the device’s improved processing power and speed.
Analyst Avi Greengart at Current Analysis agreed on the keyboard.
“The original Q had a horrible keypad, almost unusable,” Greengart said. “The Q 9’s is really good.”
According to Greengart, the Q Music 9m’s most salient change from the previous Q model was the addition of Verizon Wireless’ own screen with its own user interface to present a customized music service. As the Q platform, for now, represents Motorola’s sole handset in the smartphone space, refreshing it with customized versions for its top carrier customers is crucial, Greengart said.
“It’s extremely important for Motorola to be a player in the smartphone space,” the analyst said.
Greengart agreed that recent market data showing Motorola’s domestic smartphone market share had dropped merely reflected that the original Q’s lifecycle had waned and new models were needed. Handset life cycles today run six to 12 months, he said, significantly less than overall consumer electronics’ lifecycles of 12 to 18 months.
“If you offer last year’s operating system, last year’s keypad and no carrier-entertainment integration, you’ll get hit by the competition,” the analyst said. “Verizon needed a new, thin slab at a consumerfriendly price and the Q Music 9m is it. Where Verizon falls down is in its accompanying data plans. $80 per month is the cheapest. If you say this is music and messaging for young people, you’ll want to offer more affordable plans.”
