From flip phones to offline expansion: Motorola’s 2023 story and outlook for 2024

Back in 1996, the first flip phone that came up in the market was Motorola’s StarTAC. In 2004, the America-based company introduced its razr phone series which gathered puff. Till 2006, the company sold over 50 million units of that phone.  

In 2023, we are witnessing a déjà vu situation with flip phones returning to the market. This year, Motorola brought back its razr series with the launch of the razr 40 and razr 40 Ultra. Other brands joined the contest like Samsung’s Galaxy Z Flip 5 and Galaxy Z Flip 4 launched this year, OnePlus came with its first flip phone, the OnePlus Open and Oppo launched Find N2 Flip. 

According to Decluttr, an online service where users can sell their old tech to be refurbished for sale again, online searches for flip phones are up by 15,369% in 2023 as compared to last year with major interest from Gen-Z and young millennials.  

So what has brought the flip phone back in trend? 

Shivam Ranjan, head of marketing, Asia Pacific, Motorola says, “In every industry, when there’s a disruption, one or two brands take the leadership position. Motorola was the first early adopter followed by Samsung. The big change this year is the supply chain of components has evolved. While innovating, finding the components at an optimized price point was a pain. But this year, the supply chain of components has evolved due to which brands are foraying into this market.”

Ranjan further explains that as the industry has evolved, there are new learnings not just in terms of product development but in consumer insights as well. “With these learnings from leaders, the brand launched their versions as the foldable foam factor is here to grow.”   

He also stated findings from a report by IDC (International Data Corporation) that stated the foldable form factor is supposed to grow by almost 5.6 times by 2026 as compared to now. 

Flip Phones hold potential in the mid-range section?

With flip phones coming back in India, there’s a common trend with the pricing of products that they all are high-end, none of the brands is currently offering a flip phone in the mid-range section. Can we see flip phones in the pricing of the mid-range? Ranjan says, “As technology evolves and gains scale, the price point will come down eventually. Our razr 40 came with an effective price of 55k. I believe that the price point will come down in the category in the coming years.”

He predicts that the customer will not find the advanced features at a lower price point, similar to candy bar phones. Foldable will continue to play in premium space. The foldable ecosystem will just not become mid-segment but continue to grow in both segments.  

Growth: Urban or Rural? 

In 2023, Motorola continues to grow in metros. As compared to last year, the company is witnessing a double-digit growth in every quarter. “While the smartphone market declined by 14% in Q1 2023, we grew at 43% in that quarter, which means we’re growing 57% faster than the market.”

“Our vision for India is to grow to the No.3 brand in the next three years. Therefore, we are looking to acquire shares across geographies,” Ranjan highlighted. 

Trends in 2023

According to Ranjan, these are three major trends from their category this year

1. Explosion of 5G penetration in India: There’s a rapid adoption of 5G across price points at an affordable range.    

2. Premiumisation: The phones with lower price points are shrinking, and the replacement cycle of phones has increased. Customers spend more money on better smartphones, which can last longer periods. Affordability lever is helping it by brands offering low-cost EMIs.

3.  Foldable became a talking point: A lot of brands entered this category by offering flip and fold solutions. 

Game-changing medium 

In 2023, the brand witnessed strong growth in a digital medium. He highlights that the traditional medium is also evolving in a way to incorporate digital medium. 

Traditional medium television is augmenting by not just being linear, but leveraging CTV as part of medium.  

Digital OOH is also one of the examples, according to him. 

He believes that the game-changing medium for the next year is CTV (connected TV) and digital out-of-home. “I will bet big on CTV for next year.” 

Within digital, Ranjan notices that video consumption is growing, in both large and small time formats. YouTube Shorts and Instagram Reels are exploding rapidly. 

Live Commerce with Influencers has also grown this year. 

The company is not investing in print media. “The habit of reading has gone now, due to which we’re also limited to front page ads. The tough task in the medium is to create frequency, and if we don’t have frequency in our category we will lose customers. Brands need to touch consumers at least seven or eight times to drive consideration and build a purchase intent.” 

According to him, there’s evolution required in print media in terms of pricing, or integrating it with digital channels to make it measurable. 

This year, Motorola announced Kriti Sanon as a brand ambassador. The actor did campaigns for the G series, edge series and razr series.

In the marketing budget of Motorola, influencer marketing is growing at a rapid pace. It is a key component in all of the brand’s launches, specifically with tech influencers.  

For the launch, the company is partnering with e-commerce platforms such as Amazon and Flipkart.

Online vs Offline

Traditionally, the brand has been online heavy for its sales. This year, to expand offline reach, the brand partnered with Reliance Digital. The handset company expands its offline reach Reliance Jio Mart digital, Jio Mart.

In addition to this, the brand is expanding its reach with general trade stores. The company plans to expand it with the top five thousand MBOs.

Forecast

In 2024, the brand aims to double its share. Also, the brand will display an explosion of handsets in a premium portfolio and 5G portfolio. 

“As compared to last year, in 2023 we have grown our premium portfolio by 2 times and 5G portfolio by 8 times. In 2024, we aim to grow further,” Ranjan says. 

By next year, the brand also aims to be known for its design, with a differentiation in software experience and benefits beyond hardware.