Fort Worth-made Moto X smartphone as cheap to produce as Asian competitors

Posted Wednesday, Aug. 28, 2013  comments  Print Reprints
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Motorola’s new Moto X phone doesn’t cost more to make simply because it’s assembled in the U.S., research firm IHS said Wednesday.

The Moto X, which is being assembled at a Flextronics plant in north Fort Worth, is the first smartphone to carry the “Made in the U.S.A.” designation.

Labor costs are generally higher in the U.S. than in Asian factories, where phones are typically made. But IHS said the Moto X is about 5 percent cheaper to make than Samsung Electronics’ flagship Galaxy S4 phone. The firm said the Moto X’s overall production cost is just 9 percent more than that of Apple’s iPhone 5.

The findings come as little surprise, as the labor cost of a phone is just a small part of its production cost. IHS estimates the cost of labor and other assembly for the Moto X at $12 per phone, bringing the production cost to $226. That compares with $207 for the iPhone 5 and $237 for the Galaxy S4. IHS said Motorola keeps the cost of parts low by using standard components that don’t break much new ground.

Flextronics declined comment Wednesday on the details of the report.

By assembling the phone in Fort Worth, Motorola is able to let customers order custom designs online for delivery within four days. Standard black or white models are available immediately at retail stores.

“With the Moto X, Motorola is reaping the public relations and customization upsides of producing a smartphone in the United States, while maintaining competitive hardware costs,” said Andrew Rassweiler, senior director for cost benchmarking services at IHS.

The Moto X is being built in the former Nokia factory in the Alliance industrial complex. Flextronics, a Singapore-based contract manufacturer hired by Motorola to handle assembly, has said it expects to employ 2,000 workers there by late summer.

A Flextronics spokeswoman said the plant is still hiring. Job postings have shown assembly jobs starting at $9 an hour with other technical positions advertised for up to $17 an hour. The company said that it is paying “competitive market wages” and that it’s also hiring for managerial and other positions.

IHS said the estimated $12 cost for assembly is $3.50 to $4 more than other leading phones.

“Our initial estimate suggests the additional costs of onshoring the Moto X are relatively low,” IHS said.

The phone went on sale Friday, starting with AT&T. It’s coming to other carriers, including Verizon, this week. The Moto X’s price is about $200 with a two-year service agreement.

The Moto X is Motorola’s first phone designed from the start under its new owner, Google Inc. The Internet search company bought Motorola Mobility for $12.4 billion last year.

This report includes material from The Associated Press and the Star-Telegram archives.

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