The first smartphone to be made in America costs less to make than Samsung’s Galaxy S4, according to a teardown analysis prepared by IHS iSuppli. The research firm estimates the total production cost of the Moto X at $226, lower than the 16GB S4’s estimated $237, but higher than the $207 that it costs Apple to make the 16GB iPhone 5.
Google’s decision to build the Moto X smartphone in the United States has added a bit to its manufacturing costs, but those costs are just a small fraction of the overall production cost. IHS says the labor cost of each Moto X smartphone is $12, about $4.00 more than it costs to make a similar smartphone in Asia.
So components represent more than 90% of the cost of production, and these costs are in line with those paid by Apple and Samsung. IHS says the most expensive component is the Moto X’s 4.65″ 720p AMOLED display, at $66. The integrated applications processor and baseband processor, made by Qualcomm, is the next most expensive at $30.
“With its use of a Qualcomm-based design, the Moto X could easily be mistaken for a smartphone made by HTC or Samsung, if it weren’t for the Motorola logo,” said Andrew Rassweiler, senior director, cost benchmarking services for IHS. “The use of components that are already shipping in high volume allows Motorola to keep costs down. 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.”
By making the Moto X in America, Motorola can offer customized phones that ship to customers in less than a week. Customers can choose the color of the phone’s front and back, as well as the “accent colors.”
Currently AT&T is the only U.S. service provider carrying the Moto X. IHS estimates that Motorola is selling the phone for $540 to $580, meaning that AT&T’s subsidy is roughly $350 since it sells the phone for $199 on contract. In comparison, carrier subsidies paid to Apple and Samsung are often as high as $400.
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