Google Inc (GOOG): The Moto X Is a Phone No One Should Buy, But Many Will

Samsung’s S4 goes waterproof

Samsung has yet to jump on the customization bandwagon, but it too is stretching the limits of product differentiation.

Its recently released S4 Active is, on a technical basis, a weaker phone than the flagship S4. Still, the phone costs roughly the same because it has one key feature: it’s waterproof. To a small subset of consumers, that should be highly appealing.

Samsung disappointed investors when it reported earnings last week. Despite its diversification in products (refrigerators, semiconductors), the company’s mobile devices now account for 70% of operating profits.

As sales of the flagship S4 have lagged, Samsung is going to need variations like the Active to pick up the slack.

Jumping the shark

The Moto X, the multi-colored iPhone, and waterproof S4 collectively symbolize a watershed moment in the smartphone industry.

Rather than push the limits of processing speeds or screen quality, phone manufacturers have to turn to gimmicks to sell their devices. That it isn’t to say that these gimmicks won’t work — I expect that these devices will sell quite well.

But the companies in question are running out of bullets. If you have to turn to something as superficial as custom colors this year, what are you going to do next?

Apple, Motorola and Samsung have all promised revolutionary devices. They (and their investors) will need them. The smartphone market can no longer be relied on for growth.

The article The Moto X Is a Phone No One Should Buy, But Many Will originally appeared on Fool.com and is written by Sam Mattera.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Sam is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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