Teardown Reveals Moto X Only Costs $221 to Build

[dgstorm]

Previously we shared the iFIxit teardown of the new Moto X smartphone, but that only focused on the repairability of the device. A new teardown from the folks at IHS focused on the BOM (Bill of Materials), which is basically how much the parts cost to manufacturer the device (not including marketing). By IHS' calculations, the BOM for the Moto X is precisely $221 USD. As a reminder for comparison purposes, the Moto X costs $199.99 on-contract and $579 off-contract for the 16GB version. The 32GB model costs $249.99 on contract or $629.99 without a contract.

What's surprising about this is that the manufacturing cost side of the device is about $4-$5 bucks higher than what it costs to manufacture flagship smartphones in Asian countries. It's also interesting to note that this price is about in the middle of the pack when compared to the BOM of other flagship smartphones. For example, the SGS4 costs $236 and the iPhone 5 is $207. Share your thoughts in this "insider info."

Source: AllThingsD via MotoXForums

 

[guidot]

Waiting for all of the "why isn't the off contract price $250" posts. Ugh.

If that's just parts, then how much to build? What is the labor? $5 extra is labor?

Sent from my SCH-I605 using Tapatalk 2

 

[pc747]

Waiting for all of the "why isn't the off contract price $250" posts. Ugh.

If that's just parts, then how much to build? What is the labor? $5 extra is labor?

Sent from my SCH-I605 using Tapatalk 2

Yeah if it was built in China.
Many of us,including me, couldn't see spending top dollar for dual core. But that mx8 proved a lot of us wrong and I am still eating crow for that.

Sent from my SAMSUNG-SGH-I317 using Tapatalk 2

 

[djspy]

That's just parts? What about if we factor in labor costs and other expenses Google/Motorola have to make like paying for the building, utilities, Insurance, equipment etc etc? It comes out to a much higher number.

 

[civiksi]

Don't forget R&D. That's not free either.

 

[kodiak799]

Yeah, that teardown just proves that this was never going to be a $300 device off contract. Even "cheap" phones probably have $150 or more in parts, plus labor. The Nexus device only sell for $300 or so because Google subsidizes them

 

[alafferty82081]

The cost of labor is much higher in america, no slave labor here........

 

[NOVICE]

If this article is correct regarding the various BOM's, then I was hughly mistaken in assuming that Motorola was using the novelty of the Moto X to sell, at a premium price, a device which cost the company a lot less to get out the door than an S3 or Note 2 cost Samsung.

I was critical of the unsubsidized price of the Moto X and apparently should not have been.

 

[TatDroid]

The cost of labor is much higher in america, no slave labor here........

I was actually surprised at how LITTLE the difference in manufacturing costs was. According to iFixit the cost to assemble in the US is $12/unit, vs $7 to $8/unit in Asia.

 

[kodiak799]

I was actually surprised at how LITTLE the difference in manufacturing costs was. According to iFixit the cost to assemble in the US is $12/unit, vs $7 to $8/unit in Asia.

You ever see factories in China/Mexico? They have like 3 people doing the jobs and controlling quality of 1 American, partly why the cost advantage isn't close to what it used to be even though there's still a relatively huge gap in wages.

And the other side of that is US factories typically employ a lot more automation. $5 is not a big gap (@ 1% margin), but if we were talking PCs where there's almost no margin, for example, that $5 gap would be pretty significant.

Anyway, a decent part of that $5 labor gap might be the pseudo customization. Changing the backplate and a few color isn't much right now, but if they can offer full ala carte for $15-$20 more you might have a real winner.