Motorola backtracks on “made in the USA” plan

Motorola backtracks on “made in the USA” plan

02 JUN 2014

Motorola Mobility is set to close the US handset manufacturing plant used to assemble its Moto X smartphones, as it has apparently learned from experience why other manufacturers do not carry out production in the country.

The “made in the USA” tag was one of the major selling points of Moto X when it was unveiled, alongside the device customisation possibilities this offered. But Moto X volumes have not been enough to keep the plant afloat – and the product is reaching the end of its natural lifecycle.

The rest of the vendor’s devices largely fall into the wafer-thin margin entry-level smartphone space, meaning that it makes little sense to pay a premium to have them assembled.

With Motorola Mobility set to be sold to Lenovo, the desire to have a high-cost facility in the US would also seem to have waned – although The Wall Street Journal said that the decision to close the facility was made independently of the planned sale.

Engadget also noted that Lenovo has a PC manufacturing plant in the US, and has iterated the competitive benefits of having facilities close to consumers.

A report from IHS last year suggested that the manufacture premium on Moto X was not especially onerous. But this is also dependent on the shipment volumes achieved, and while Moto X has been popular, it has not set the world alight.

The paper also said that Moto X will still be manufactured in lower-cost facilities in Brazil and India, and it is not entirely clear if the customisation options will still be available – previous reports suggested that these may make their way to customers beyond the US market, which is likely to mean it is available on devices assembled outside of North America.

There has also been speculation that Motorola is readying its “X+1” successor device, which is likely to reach the market later this year. Few firm details have emerged.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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