The company has seen massive growth in one region, and now the sights are set globally.
Motorola is a bigger deal than many of us realize. It holds a second-place market share position in several countries, and is extremely popular across massive markets like Brazil and India. It's even become the top unlocked phone brand in the U.S. And Motorola's new President, Sergio Buniac, thinks it can go much further — and has a proven plan to work with.
I had the opportunity to sit down with Mr. Buniac for about a half hour over some espresso and pão de queijo, which really is how I aim to conduct all of my interviews going forward. We discussed where Motorola stands today, where it's headed, and how it plans to replicate its successful Latin American strategy globally. We were also joined by Rudi Kalil, Vice President of Motorola North America, to provide further insight into Motorola's goals here.
A success story in Latin America
After 20 years with Motorola, Buniac came to this President role from his previous position as SVP of Motorola's Latin America business segment, where he oversaw the company's impressive growth in the region. Starting from when Lenovo's acquisition of Motorola completed in late 2014, Buniac and the rest of the company made moves to capitalize on its strengths and rapidly grow in the region. It was a dual-pronged approach, going after large and competitive countries like Brazil, Argentina and Mexico in a metered way, while aggressively going after smaller and less-developed markets like Chile, Colombia and Peru — the latter group in particular containing couple dozen distinct countries that had great conditions for growth.
With just a couple years of Moto G and Moto E sales in Latin America, Motorola attained an impressive market position. By the end of 2017, Buniac says, Motorola reached a No. 1 or No. 2 position in the top seven Latin American markets. Motorola's growth last year was 20 times the market's overall growth — 40% versus 2%. In the "premium" segment, which is defined as the $400-550 range, Motorola moved from just 4% of the market to 30%. Despite that amazing position, he specifically says that Motorola's view has "never been 'let's be No. 1 next week' — it's a long-term investment and commitment." He notes that Motorola has gained impressive market share, but now the goal is the improve customer engagement through improved support, better retail services, beta access to apps and more consistent software updates.
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Motorola's Latin America operation is completely centered around the popularity of the Moto G. Its price range of $250-350 is perfect for the overall market conditions, and the numbers show it: Buniac has no reservations about calling it "the most-sold phone in Latin America right now," and explaining that the rest of its business grows out above and below it with the G as an influence.
Moving to new markets
Motorola is the No. 1 unlocked phone brand in the U.S., but it wants to keep growing.
Seeing so much sustained growth in Latin America, Buniac wants to replicate that in North America — that's where Mr. Kalil comes in. He has years of experience across the technology industry, in particular with mobile carriers, which is extremely important when you're trying to make moves in the U.S. and Canada in particular. Kalil very proudly states that Motorola is the top-selling unlocked phone brand in the U.S., driven primarily by the Moto G. But the mission is to at least reach the No. 3 position overall — a bold expectation, considering it's currently in the 4 or 5 spot, with roughly 4% share. Still, Kalil has some footholds to work with: Motorola's growth in 2017 was up 50% from the previous year, and it sees particular strength in the Moto Z/Z2 Play and Moto X4 alongside the ever-present Moto G. The Moto E is a mini success story in its own right, being a huge hit with prepaid carriers and taking a top-3 position in its price category.
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So, what about the Moto Z? It's clear that this is a product line (and price point) where Motorola continues to struggle. Outside of the Moto Z/Z2 Play being relative hits in their price brackets, Buniac admits that traction for the Z/Z2 Force hasn't been great. While the idea of Mods continues to draw consumer attention, the shatterproof technology is a tougher sell to consumers — it is, after all, tough to market something that won't happen. And in general, the super-high-end price range where these phones play is particularly crowded and competitive. He reiterated that Mods are here to stay and gaining traction with consumers across the board, and that there's work being done to increase the screen size of the Moto Z family while retaining compatibility with existing Mods. Presumably this would come from smaller bezels, a slight change in case design and even the removal of the shatterproof display technology that saddled the Z2 Force with so many design trade-offs. We should start to see these changes in the next generation of the Z line.
Building on strengths
As for the future of Motorola's phones, Buniac doesn't feel a dramatic rethinking of the product line is necessary. The Moto Z, X, G and E lines are recognizable and stable, and there's plenty of room for growth and innovation within the current structure — but he agrees that there are still too many models, saying that Motorola wants to "drive complexity down big time." Not to the point of how simple things stood when Motorola was owned by Google, but certainly in that direction.
Buniac wants to reduce the number of models and colors inside each line, and reduce the range of models coming to each region. This is all working toward not only making it easier for consumers to understand, but for retail operations to manage and Motorola to ultimately improve after-sale support and software updates. He says that right now, "it's 90% discipline and 10% innovation," with the goal of smoothing things out and reaping the benefits from that simplification.
The Z, X, G and E lines will evolve — and the goal is to simplify them so each product improves.
Continued consistency in design and features across the line is extremely important, Buniac says, and you can see that acutely in the new Moto G6 and Moto E5 that clearly borrow from the Moto X4. The software offerings across all four lines are nearly identical, within the restrictions of the hardware differences between them. And then beyond that stable base, Motorola can differentiate in each line with different features that are most important to that market — like Mods, larger displays, longer battery life or advanced cameras, for example.
Buniac understandably didn't want to reveal anything concrete about future products, particularly as the just-unveiled Moto G6 and E5 were taking the spotlight, but he did leave me with the simple reassurance that "there is always innovation coming [...] you will see a few announcements coming this year that are very exciting."
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