The new Moto G phone starts at $179 in the U.S. without a contract requirement. That compares with $600 or more that people must pay for phones without traditional two-year service agreements.
Motorola, which is owned by Google Inc., said Wednesday that it will target an estimated 500 million people worldwide who can't afford phones costing more than $200. In the past, the company said, those consumers were limited to phones with technology that's at least a year old and thus unable to run the latest apps and services.
The company is targeting not just emerging markets, but budget-conscious consumers in the U.S. Although people can often get phones with contracts at the lower price, service fees are higher because they include the cost of subsidizing those phones. And many people don't have good enough credit to qualify and are limited to so-called prepaid plans, which aren't eligible for the subsidized prices.
With the Moto G, Motorola is trying to offer a device that is closer to what's currently available on leading high-end phones, although it won't work on the faster 4G LTE networks emerging around the world. That's in part because many target customers are still on 3G or even older technology.
The phone's 4.5-inch screen, measured diagonally, is capable of high-definition video, but only at 720p, not at the better, 1020p standard found in leading phones. The resolution is 329 pixels per inch, which is comparable to the 326 pixels in the latest, 4-inch iPhones but short of the 441 pixels in Samsung's 5-inch Galaxy S4.
Motorola executive Charlie Tritschler said the company chose a traditional LCD screen rather than an AMOLED screen found on Samsung's devices. Colors on AMOLED screens tend to be richer, but Tritschler said LCD screens offer decent performance without adding cost.
The $179 price is for a phone with 8 gigabytes of storage, not the 16 gigabytes typical with high-end phones. A 16-gigabyte version is available for $199. The rear camera can take images at 5 megapixels, which is less than leading phones.
Motorola executives say they focused on features that mattered most to their target customers.
Some models will have slots for two SIM cards, which is important in places where phone rates vary so much that callers will switch cards and carriers regularly for the best deals. There's also an FM radio tuner, which is rare in phones.
The Moto G has a recent processor from Qualcomm and runs a recent version of Google's operating system, Android 4.3, also known as Jelly Bean. The newest version, 4.4 or Kit Kat, is promised by January. Kit Kat was designed to work well with older phones and the latest devices alike.
The phone starts selling in Brazil and parts of Europe on Wednesday. It will be available in Canada, parts of Asia and the rest of Europe and Latin America over the next few weeks. It is expected in the U.S., India, the Middle East and additional markets in Asia in January. Motorola expects to start selling it in selected African markets early next year.