There’s been a lot of speculation on exactly how much it costs Motorola to build their custom Moto X’s here in the states (as opposed to overseas like most other devices). It was a bold move, one we all knew came at a cost and an issue we’ve talked about many times in our podcasts. Paying US wages and medical benefits doesn’t come cheap, and we even speculated this as the reason why many didn’t get the off-contract Nexus-pricing they’d been hoping for when the phone was finally released.
All Things D did a little digging around and according to analysts at IHS intelligence firm, the cost of assembling a Moto X here in the states could add roughly a $4-$5 premium on top of every Moto X. According to preliminary estimates, the Moto X costs around $209 in components, with another $12 spent on manufacturing ($221 total). By contrasts, smartphones made in Asian countries only cost OEM’s like Samsung and Apple an estimated $8 to build.
Sure it doesn’t sound like much, but it quickly adds up and cuts into Motorola’s profit margins where the money will need to be made up elsewhere (another reason why the device might feature many “mid-range” specs). It should be noted that full price for the Moto X is $580, a few dollars cheaper than other offerings from Samsung/Apple/HTC. Remember, Google didn’t just buy Motorola for their patents, and Motorola needs to bring itself out of the red to prove a worthwhile investment for Google.
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TAGS: Motorola Moto X