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Moto X's 'Made in America' prestige could cost $5 per phone

Moto X hero (1024px)

Motorola is advertising the Moto X as the first smartphone ever assembled in the United States, and that comes at a cost. Analysts at market intelligence firm IHS estimate that the cost of domestic assembly might add a $4–$5 premium to the price of every smartphone. The company told All Things D that the phone costs roughly $221 to build based on a preliminary cost estimate, of which Motorola might be spending as much as $12 on manufacturing alone. IHS says that phones produced in Asia typically cost a good bit less to manufacture. For instance, IHS previously estimated that the Samsung Galaxy S4 costs $8.50 for manufacturing, and the iPhone 5 just $8.00.

While a few dollars here and there might not sound like much to pay for a "Made in America" product, it could potentially add up to a significant amount. Motorola can't necessarily pass that cost on to the consumer, since most high-end smartphones in the United States cost the same: $199 on-contract and around $600 at retail. The Moto X retails for $579.

Preliminary numbers

It's worth noting that these are just preliminary estimates from the market intelligence firm, not necessarily the actual amount that Motorola or Samsung or Apple pay to produce their devices. IHS typically warns that a number of potential cost adjusters are left out of its calculations, and we're not sure how it arrives at its numbers. Motorola might also be making up the cost of doing business in the US by using lower-end specs than the competition, and / or simply by being closer to where its phones are sold. But whether the company is flaunting "Assembled in the USA" as a marketing ploy or as an economic move, it sounds like the company could be paying a little bit more up front to benefit further down the road.

The Verge
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