Google Inc (NASDAQ:GOOG) has been heavily criticized for its 2011 purchase of Motorola Mobility. The handset maker has been a persistent drag on Google Inc (NASDAQ:GOOG)’s bottom-line, as the unit’s inability to compete with other Android OEMs (like Samsung (NASDAQOTH:SSNLF)) has led to quarter after quarter of losses — Motorola lost $271 million last quarter alone.
That could soon change. Motorola’s new advertising campaign suggests a completely revamped company, and the upcoming Moto X smartphone could be the first in a series of popular products.
If Motorola is on the verge of a turnaround, that could shift the unit from a liability to an asset.
Motorola’s advertising campaign
Motorola rolled out a new advertising campaign to coincide with the Fourth of July holiday. The ad which, as Business Insider notes, bears a striking resemblance to Apple Inc. (NASDAQ:AAPL)‘s recent campaign, is for the company’s upcoming Moto X smartphone.
Regardless of the phone’s features, it is notable for one major reason: it will be the first smartphone fully manufactured in the US.
Will that ultimately boost sales? If the device proves to be terrible, it won’t matter where it’s made. But if it turns out to be a solid phone, the “made-in-America” tag could be a point of pride.
In an interview at the D11 conference in May, Motorola’s management explained the division’s new philosophy. Going forward, the company will attempt “moonshot bets” — aggressive, high risk/high reward moves that could fail spectacularly, or revolutionize the industry.
The Moto X could be the first of these such bets. The device has yet to be fully introduced to the world, but Motorola’s CEO has claimed that the phone will be “contextually aware,” that is to say, it will be able to tell what’s going on around it, and react accordingly.
The phone is able to, for example, tell if it’s in a car traveling down the highway. In that instance, perhaps the Moto X could switch over to voice-commands, or activate Google Inc (NASDAQ:GOOG) Maps.
Without actually seeing the phone, it’s impossible to predict its success, but that kind of innovation could certainly help.
Apple and Samsung’s disappointing sales
Apple Inc. (NASDAQ:AAPL) and Samsung continue to make billions from their smartphones. In fact, when it comes to smartphones, they are the only two companies making any profit at all.
Despite this, the stocks of both tech giants have stumbled (Samsung within the last month, Apple Inc. (NASDAQ:AAPL) since last October) as their growth has slowed. Reports of disappointing iPhone 5 sales plagued Apple all last fall, while sales of Samsung’s S4 are said to have slowed significantly.
Perhaps this is because the phones have seen little innovation, and the smartphone market is largely saturated.