Motorola’s $100 bet on customer loyalty reveals problem with Android updates and multi-year contracts

The speed of innovation is constantly at odds with the desire for customer retention. Multi-year contracts ensure carriers a source of revenue and help subsidize expensive smartphones that would otherwise sell for hundreds of dollars. But Android has added a third variable to this price vs. contract debate: software updates.

Motorola announced three new phones on Verizon, a CDMA network in the U.S., launching in the next couple of months. The Droid RAZR HD, RAZR MAXX HD and RAZR M are variations on themes, design-wise and specs-wise, we’ve seen from the company before. The RAZR HD was announced in Canada for the same day. The announcements themselves are not really of interest to us here in Canada; rather, the acknowledgement of an Android update conundrum and an amiable solution was what piqued my ears the most.

Motorola has set up a sign up page allowing select users to receive $100 back if their current Moto phone is stuck on a version below Android 4.1 Jelly Bean. Of course, you must trade in your current device, and it’s not applicable across the entire product line, but it’s a gesture, an honest to goodness attempt to win the affections of otherwise-spurned Android users.

Whether this offer would have been proffered if Motorola hadn’t been bought by Google no one knows, but it’s clear the companies are attempting, outside the Nexus product line, to get that Jelly Bean market share above 1.2% as quickly as possible.

The promotion does not apply to Canadian phones or carriers at this time, but that’s not what this article is about. The three-year contract makes it difficult to justify upgrading a smartphone when consumers are not used to paying for that privilege. But smartphone life cycles are shortening rapidly; in fact, every major OEM including Samsung, Apple, HTC, Nokia and Motorola have, or will shortly, obsoleted its previous flagship device within 10 months of its initial release. This applies to the iPhone 4S, Galaxy S II, HTC Raider/Amaze, Lumia 900 and RAZR respectively.

Any gesture, small or large, from an OEM to offset the cost of upgrading before the end of a two- or three-year contract is a good thing. The amount itself, $100, is certainly not enough to offset the cost of a new device, especially if the upgrade is mid-contract, but it goes a long way to proving that manufacturers understand customers’ frustrations in regards to Android updates. Devices less than two years old, such as the ATRIX 4G, will likely never officially see life beyond Gingerbread in Canada, and the more products a company puts out, the more difficult it is to juggle myriad updates in the long term.

The problem highlighted earlier by Samsung’s lack of updates for the Galaxy Nexus proves that manufacturers and carriers put software updates fairly low on the priority list. Getting the products into consumers’ hands is their primary focus, but consumers must be diligent in their research when deciding on a new smartphone to buy. Motorola has taken an important step in showing its customers that it ostensibly cares about software updates. Yes, it’s an upsell opportunity in the guise of a magnanimous gesture, but it’s a worthy gesture nonetheless.