Moto G7 Family Extends Lenovo’s Strong Value Proposition, But Leaves Room for Competition

Moto G7 Family Extends Lenovo’s Strong Value Proposition, But Leaves Room for Competition

February 7, 2019
Avi Greengart, Technology Market Analyst

Bottom Line

Lenovo’s Moto G series updates a successful formula with notched displays and updated processors. Three models cater to buyers prioritizing budget (G7 PLAY), battery (G7 POWER), or balance (G7). They will sell, but flaws in pricing and materials leave room for competitors.

Analytical Summary

Lenovo’s Moto G series is the company’s bread and butter smartphone brand: cheap enough to sell in volume to consumers priced out of premium phone tiers, but expensive enough to provide some profit margins. The 7 line continues the trend of offering a strong value proposition by combining reasonable hardware with superb software, and the G7 POWER should find a niche with consumers who want endless battery life. However, the G7 is not inexpensive at $299, and the G7 POWER ($249) and G7 PLAY ($199) suffer from cheap materials and just average imaging. This leaves room for competitors to undercut Lenovo or match the company on price and offer more premium design.

Competitive Landscape

In the U.S., the $200 - $300 segment is surprisingly uncompetitive, and Lenovo’s Motorola brand has been steadily improving its carrier distribution. Outside the U.S., HMD’s Nokia line is a key competitor, offering a similar balance of good components, clean design, and stock Android. HMD is trying to enter the U.S. market, but lacks strong carrier support. Huawei’s Honor is competitive at the top end of the $200 - $300 range, and the brand is growing rapidly in Eastern Europe. In emerging markets, Xiaomi is a force in this segment, but it has no phone distribution in the U.S. at all.

Traditional mid-tier competitors in the U.S. have been weakened by poor decisions (TCL’s Alcatel) or sidelined by politics and sanctions (ZTE). Samsung and LG offer products in this segment, but their focus lies higher on the price curve, and they rely on their brands to extract a premium in the mid-tier rather than compete on value.

Will Consumers Buy It?

Yes. They can spend less, but stepping up to the G series means buying a budget phone that will still be pleasant to use in two years’ time. The white G7 is particularly attractive – it looks far more expensive than it is. However, patience has its rewards. Prices on the G line tend to drop a few months after launch. Amazon has also offered the Moto G line to Prime Subscribers at a discount in exchange for preloaded Amazon apps.

Press Release

https://blog.motorola.com/2019/02/07/what-matters-most-to-you-new-moto-g7/