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If Motorola were to build the Google Nexus 5

MotorolaUltra

If Motorola were to build the next Google Nexus phone, presumably named the Nexus 5, this would cause some concerns with its Android OEM partners. That Google may favor Motorola has been an issue ever since the purchase was announced two years ago. Now there is again another rumor that Google may select Motorola to build the next Nexus phone.

The value of building the Nexus phone is more about marketing and pride than sales

The Google Nexus phone has never sold all that well. This can be gleaned from the absence of Google Nexus phone milestone announcements from Google. There is also scant information on Google Nexus phone sales available on the Web.

What we do know is that in March 2010, Google announced that the Nexus One sold 135,000 phones in its first 74 days. During the same 74 day period, 1.05 million Androids were activated. The 135,000 sales figure represented almost 13% of all Android sold during the period.

The Apple vs. Samsung case on the other hand revealed details about the sales of the Galaxy Nexus released in 2011– One million Galaxy Nexus phones in six months. This was 0.5%, less than one percent, of Android phones sold during that period. This is a huge drop from the previous year’s Nexus sales.

Still, being selected as the Nexus manufacturer could give the company a lot of street cred. The latest Nexus manufacturer, LG, shipped 7 million phones in the quarter prior to the Nexus 4 release. LG shipped 8.6 million smartphones in the last quarter of 2012, an increase which is usually attributed to holiday spending. But post Nexus 4 and post Christmas, LG’s, sales continued to rise, with 10.3 and 12.1 million phones in the first two quarters of this year. So it does look like being the Nexus manufacturer enhanced the LG brand.

Now it is also about the subsidy

In 2012, Google started subsidizing Nexus devices. Nexus 4 sales are modest. Last February, members of the XDA Developers forum estimated Nexus 4 sales to be about 1 million units in a period of just under three months. At this time, Google had reported that 1.3 million Android devices were being activated per day. Still, you have to look at this figure in the context that Nexus devices are only subsidized in a few markets, and the subsidy may have a more significant effect in those markets.

A Motorola Nexus phone would raise eyebrows but not be a deal breaker

A Motorola Nexus phone may raise fears that Google may favor its own subsidiary more and more over time. Still, where are these manufacturers going to turn to? There is Windows Phone, where you have Nokia backed by Microsoft. Other options would be to licence BlackBerry 10 or get on board the Intel-Samsung backed Tizen. Bottomline is, Android manufacturers would double down on alternative platforms but still make Android devices. There is really nowhere else to go right now.

A Motorola Nexus would be a lifeline for Motorola

Motorola shipped 3.9 million smartphones in the first quarter of 2013. That is less than the embattled HTC or the ailing BlackBerry. A Motorola Nexus phone could revive the Motorola brand name, and a few hundred thousand in Nexus phone sales a month will actually be a big deal to Motorola. Google also does need to find some way to make the US$10 billion it invested in Motorola work.

Which Motorola phone?

The next Google Nexus phone would be based on an existing handset, like previous Nexus phones. So what candidates do we have? The phone could be based on the Moto X or the DROID Ultra or Maxx. It really does not make much of a difference on which phone it is based. All three devices use the same technology with 720p displays, a dual core Qualcomm Snapdragon S4 Pro processor, 2 GB of RAM and a 10 megapixel camera. It really is a matter of whether we will be seeing a 4.7-inch device or a 5-inch device, and how large the battery will be. The Nexus 5 would have the advantage of LTE and a better camera, and so in my opinion would still be an upgrade. Still, it would be a tame Nexus launch, akin to the Nexus S launch in December 2010.

I still do not think Google will have Motorola build the next Nexus. A Google-subsidized version of the Moto X, or one of the DROID’s, at US$299 or US$349 would make Verizon, AT&T and Sprint rather unhappy, since this would make their own subsidized Moto X and DROID handsets look expensive in comparison. Well, we will probably find out in a month or two.