Moto X by Motorola, a Google Inc (NASDAQ:GOOG) company, has its eyes set on the smartphone market. While the iPhone and Galaxy S4 are getting a lot of attention right now, the search engine giant is hoping to turn things upside down in the near future – and in more ways than one.
It is easy to believe it is cheaper to produce products in Asia than in the United States. But is this really the case? Or is this something people believe for no good reason?
While there is a reason why so many technology companies rely on Asian firms for production, it is important to consider the fact that keeping things in North America may not be all that bad of an idea.
The new Moto X is looking to change the thought process of millions of people. According to a recent report by IHS, “Motorola may have overturned this truism, building a smartphone assembled in the United States but with a combined bill of materials (BOM) and manufacturing cost in the same range as market-leading products made in Asia.”
In other words, the Moto X is going to be manufactured in the United States at a comparable cost as other products made in Asia.
At what Cost, Google Inc (NASDAQ:GOOG)?
Everybody knows it is possible to manufacturer products like these in the United States. Most of these people also believe it means that the end result is a higher retail price.
This doesn’t appear to be the case with the soon to be released Moto X. Instead, the phone is priced affordably enough to attract customers who are currently relying on another model.
Let’s get down to the numbers. The BOM of the Google Inc (NASDAQ:GOOG) Moto X is $214, according to results shared by IHS. Add in a $12 manufacturing expense and the total cost to produce the phone is $226.
With that cost in mind, the device is in the middle of the pack when compared to popular devices such as the iPhone and S4. For example, the S4 checks in at $237 with the 16GB iPhone 5 at $207.
Google Inc (NASDAQ:GOOG) has done it again. It appears that the company will be able to keep manufacturing in the United States without blowing its cost out the roof.
This is why the following hedge fund managers love the company: Robert Karr, Christopher Hansen, Sandy Nairn, Daniel Benton, and Gregory Bylinsky.
Disclosure: none