It costs $5 more to build the Moto X in The United States compared to outsourcing to Asia

The Moto X, it’s finally out, so you know what that means, right? Someone has to buy one, tear it apart, and guess as to how much each and every individual component inside the device costs. This is called the “bill of materials” or BOM in industry parlance. Companies obviously want to spend as little as possible on parts, so they can spend more on marketing, and of course generate profit.

According to AllThingsD, it looks like the Moto X costs about $212 to make, and yes, that includes labor. That “X8 Computing System” Motorola can’t seem to shut up about, it’s basically a dual core Qualcomm Snapdragon S4 Pro paired up with two chips from Texas Instruments, the MSP430 and a chip that belongs to the C55x family, at least that’s what AnandTech found when they did some of their own digging.

Now for the big question: All this “Manufactured in the USA” nonsense, did it make the Moto X ridiculously expensive? Yes and no. The added labor cost comes out to something like $5, which may sound insignificant, but I can tell you this right now from my experience of working at Nokia: A $5 increase in BOM would have given the CFO a panic attack.

Why is Motorola making the phones in the USA, anyway? It really is all about the colors. They want you to go online, build a phone to your exact specifications, and then build it and ship it to you.

And hey, Made in the USA is good PR … at least in the USA.

Like this post? Share it!

  • If that $5 is what it costs more to make the phone in the USA, then that extra $5 actually IS a marketing expense too.

  • Patruns

    So you sell the phone for $5 more. Really, is anyone going to complain? How would they even know you are charging $5 more? It’s not like you are charging $5 more for a bag of potato chips…..

  • ConCal

    Simply for the fact that the workers in the US are getting a living wage makes the $5 worth it. I don’t care where on the globe they make my phone as long it is in a country that has decent labor laws; China is not one if those countries.