Rumor mill is moving again and this time the talks are about Google’s (NASDAQ:GOOG) next smartphone that’s expected to come at a much lower price band. According to the rumors Google is secretly working on a device that will add up to its lineup of Nexus devices, but unlike others will belong to the sub-$100 category. Analysts are sure that this obviously won’t be Google’s next flagship device; rather it will be launched alongside the Nexus 6. Many suspect Google might call the $100 device “Nexus 6 Mini”, following trends set by Apple (NASDAQ:AAPL) and Samsung (SSNLF).
Success Formula Google Should Follow
What makes the news so tempting is a combination of two things – the Nexus name and the $100 price tag, i.e. quality and price. Google is a highly trusted brand that’s known for offering great quality devices. Automatically, associating the Nexus name with the device should attract trust in the phone. Next, the company had realized the power of the price-sensitive market and has always been meaning to tap into the space. By offering the Nexus 7 tablets at reasonable rates, the company has already tasted sweet success and maybe that’s what’s playing in their minds now also.
- Warning! GuruFocus has detected 3 Warning Signs with GOOG. Click here to check it out.
- GOOG 15-Year Financial Data
- The intrinsic value of GOOG
- Peter Lynch Chart of GOOG
The combination of quality and price is a rare thing. Not all devices can offer both to the consumers and it’s this point only that determines how successful that device will be. Manufacturers stress on quality while making phones for premium buyers, but shift focus to price while catering to the value-seeking buyers. And, there are some who try and balance both these factors – such as Google’s very own Moto G and even Nokia’s (NYSE:NOK) latest Nokia X.
What Google Must Realize
From the rumors it’s pretty clear that Google is making the device keeping in mind the emerging markets with price-sensitive buyers. The strategy in play is very simple – penetration marketing. The strategy will help Google acquire different classes of buyers and expand its span on the overall market. What the company needs to make sure is, it delivers the price aspect keeping the quality aspect intact. The market already has ample manufacturers making $100 smartphones. Then why should anyone choose Google? The answer should be quality.
If Google can make sure that the overall user experience from the device will be better than the best in its class, there is no doubt that it will give each and every other player in the market a run for their money. What Motorola has done with Moto G is commendable. The kind of configuration the device offers at the price point has created ripples all across and makes this device a must have. Even Nokia X offers great hardware at very affordable rates. May be these players triggered Google’s thoughts to offer the Nexus 6 Mini.
To drive home the discussion, if Google makes an affordable smartphone that’s just cheap, then the company will face a hard time selling it. Instead it needs to focus on making it inexpensive instead of just cheap. The handset should give its users a nice feel while holding and using and should have minimum acceptable durability. If Google can make sure these points are present, then there will be no stopping it.