Mobile

Moto X teardown proves Google isn’t breaking the bank by manufacturing in the U.S.

Image Credit: AT&T
NOTE: GrowthBeat -- VentureBeat's provocative new marketing-tech event -- is a week away! We've gathered the best and brightest to explore the data, apps, and science of successful marketing. Get the full scoop here, and grab your tickets while they last.

With the Moto X, Google and Motorola are showing that “Assembled in America” can also mean “Assembled cheaply in America.”

According to a preliminary report from analysis firm IHS, the components used the build the Moto X total $214, which combined with an estimated $12 assembly cost means it costs Motorola $226 to put it all together.

This, as IHS says, means that the premium attached to “onshoring” the Moto X — estimated at $3 to $4 —  is pretty low.  According to previous reports from IHS, the Galaxy S IV costs Samsung $8.50 to assemble, and Apple spends $8.00 each time it manufactures an iPhone 5.  (IHS estimates that the Moto X’s  total manufacturing cost is 9 percent more than the iPhone 5 but about 5 percent less than the Galaxy S4.)

But while Google is spending a bit more to make the Moto X in the U.S., doing so is what ultimately allows the company to offer consumers their own custom versions of the phone — one of its biggest selling points.

moto-x-internals

Above: Moto X: Pretty pretty and pretty cheap. (Source: IHS)

IHS also points out that there isn’t much new or impressive with the Moto X’s components, which are largely mid-range and present in many other existing phones.

This is all a good thing. By keeping costs low and offering the device for $579, Motorola stands to make some significant profit if the Moto X ends up selling well (assuming the company isn’t losing an inordinate amount of money elsewhere).

Considering that Google spent $1.5 billion on Motorola in the hopes that the company would eventually become a moneymaker, that profit margin is a big deal. If things go right, the Moto X could be the first step in making that happen.

0 comments