Moto X cost-to-build breakdown suggests US assembly adds little expense

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Having its Moto X assembly plant in the US offers Motorola a number of benefits: its great PR for promoting the phone in the US, it enables the company (once the initial rush dies down, at least) to get even custom-made phones out to customers in just a handful of days, and we’ve even heard the theory that it could be a cunning end-run on any future attempts to block imports over patent disputes. However, we initially approached the idea with trepidation, worried that the added expense of US assembly would ultimately make the Moto X too expensive to produce. Now that the phone’s hear, it’s not the cheapest thing in the world, but it’s hardly crazy expensive, either. Today, we get to look at a detailed analysis of just what it might cost to build the Moto X, and what impact US assembly really has.

Straight-up parts alone make the Moto X appear to be worth about $214. Manufacturing adds another $12 to that cost, for a total production price of $226. Ultimately, the decision to finalize manufacture in the US may only contribute an extra $4 or so to costs, at least compared to assembling abroad and importing.

That also suggests that Motorola is still able to turn a nice profit on the phone, based on what we’ve seen of off-contract pricing. Granted, these aren’t the same high margins Apple enjoys (with an iPhone 5 costing even less to make than a Moto X), but a couple hundred bucks per handset isn’t anything to shake a stick at.

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Source: IHS
Via: GigaOM

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About The Author
Stephen Schenck
Stephen has been writing about electronics since 2008, which only serves to frustrate him that he waited so long to combine his love of gadgets and his degree in writing. In his spare time, he collects console and arcade game hardware, is a motorcycle enthusiast, and enjoys trapping blue crabs. Stephen's first mobile device was a 624 MHz Dell Axim X30, which he's convinced is still a viable platform. Stephen longs for a market where phones are sold independently of service, and bandwidth is cheap and plentiful; he's not holding his breath. In the meantime, he devours smartphone news and tries to sort out the juicy bitsRead more about Stephen Schenck!