Moto X $399 off contract this morning

[anon(847090)]

None of us knows the production costs. All we can know is the price of the various components. Then there is the cost of assembling them in the US, which of course is higher than devices assembled in China, by a lot I am sure.

The additional cost to assemble in USA is $5

Moto X costs around $209 in components, with another $12 spent on manufacturing ($221 total).

 

[NoYankees44]

I suspect they are taking a loss on these in order to get the phone in more hands. They are trying to rebuild their brand.

With papa Google paying the bills, this could be the case, but I have a hard time seeing moto just eat a loss(or incredibly low margin) for 8+ months on a flagship.

 

[DayThyme]

With papa Google paying the bills,

Motoroogle is not the Motorola of yore. Google takes a loss on the Nexi and for years took a loss on Android. They may or may not be making money off of Android now, but they get it that mobile is the future and they are flush with cash so they are taking a loss in the mobile space right now to future proof their company. I am sure Google's corporate execs are the ones planning Motoroogle's future, too.

 

[DayThyme]

The additional cost to assemble in USA is $5

Moto X costs around $209 in components, with another $12 spent on manufacturing ($221 total).

Where are you getting your data from?

And you haven't mentioned anything about R&D/engineering, advertising, shipping, supply chain or customer support costs, let alone the cost of the corporate/administrative structure. All of those are costs need to be factored in before you can say you have turned a profit.

ETA - and are there any licensing fees involved? Perhaps those are all paid at the component level, idk, but there could be patents on combinations of components and it would be the manufacturer of the finished product who paid those.

ETA - and what about the costs to service devices under warranty? And the costs of processing returns and the loss associated with returns? All of that needs to be factored in before you can say you have turned a profit.

 

[anon(847090)]

Where are you getting your data from?

And you haven't mentioned anything about R&D/engeineering, advertising, shipping, supply chain or customer support costs, let alone the cost of the corporate/administrative structure. All of those are costs need to be factored in before you can say you have turned a profit.

data from research firm IHS http://www.droid-life.com/2013/08/28/moto-x-reportedly-costs-221-to-build/

if you look at how much carriers pay OEM for a device sold then you will know Moto X at $399 is not a loss for Motorola.

Att/Verizon/T-Mobile/Us Cellular pay around $399 to Apple for every iPhone sold
S4 its about $380. moto X maybe around $350

 

[DayThyme]

data from research firm IHS http://www.droid-life.com/2013/08/28/moto-x-reportedly-costs-221-to-build/

So components cost $209 and manufacturing costs $12. No mention at all of R&D/engineering/software development, advertising, shipping, supply chain, customer support, warranty service, loss on returns, licensing fees and corporate/admin costs. All of those costs factor into whether or not a device is profitable.

if you look at how much carriers pay OEM for a device sold then you will know Moto X for $399 is not a loss for Motorola.

moto X maybe around $350

OK, but selling to a carrier in volume reduces your shipping, returns and customer service costs as well as with Verizon, warranty service. That's why in any area you will get a discount on bulk purchases. And the bulk purchasing by a carrier is on a very, very large scale compared to selling to an individual.

If they sell the device to Verizon for $350, then I am even more certain that they are not making a profit by selling the device to individuals for $400.

 

[NoYankees44]

data from research firm IHS http://www.droid-life.com/2013/08/28/moto-x-reportedly-costs-221-to-build/

if you look at how much carriers pay OEM for a device sold then you will know Moto X for $399 is not a loss for Motorola.

Att/Verizon/T-Mobile/Us Cellular pay around $399 to Apple for every iPhone sold
S4 its about $380. moto X maybe around $350

These are still making a vast amount of assumptions and(as far as i can tell) they do not include equipment, engineering, maintenance, ect. Basically all the things that determine if a Project is profitable. Which is much more important than the margin on individual devices. This info cannot be known unless someone leaks something from inside moto.

 

[anon(847090)]

So components cost $209 and manufacturing costs $12. No mention at all of R&D/engineering/software development, advertising, shipping, supply chain, customer support, warranty service, loss on returns, licensing fees and corporate/admin costs. All of those costs factor into whether or not a device is profitable.


OK, but selling to a carrier in volume reduces your shipping, returns and customer service costs as well as with Verizon, warranty service.

I agree there are other costs but Motorola wont be taking a loss for device sold at $399.. the profit margin will definitely shrink but they will still make profit.

also cost of components/manufacturing comes down after few months

 

[DayThyme]

I agree there are other costs but Motorola wont be taking a loss for device sold at $399.. the profit margin will definitely shrink but they will still make profit

All of the data you have posted indicates otherwise.

 

[anon(847090)]

All of the data you have posted indicates otherwise.

I dont have a solid data for Moto X but here is what Moto G makes which was confirmed by Motorola spokesperson.

Motorola makes a tiny profit on every Moto G sold

Motorola makes $10 profit on G

 

[anon(847090)]

So components cost $209 and manufacturing costs $12. No mention at all of R&D/engineering/software development, advertising, shipping, supply chain, customer support, warranty service, loss on returns, licensing fees and corporate/admin costs. All of those costs factor into whether or not a device is profitable.


OK, but selling to a carrier in volume reduces your shipping, returns and customer service costs as well as with Verizon, warranty service. That's why in any area you will get a discount on bulk purchases. And the bulk purchasing by a carrier is on a very, very large scale compared to selling to an individual.

If they sell the device to Verizon for $350, then I am even more certain that they are not making a profit by selling the device to individuals for $400.

Yes, most moto X units are sold via carrier and only few units are sold off contract

 

[Ry]

This is the best option for anyone on Verizon that has unlimited data right now and wants to keep it and still get a brand new (not used) phone.

 

[DayThyme]

This is the best option for anyone on Verizon that has unlimited data right now and wants to keep it and still get a brand new (not used) phone.

If you have a family share plan, there is another option to get an on contract moto x. Check out the verizon forum here:

http://forums.androidcentral.com/verizon/227608-instruction-how-keep-unlimited-data-verizon-89.html

 

[Ry]

If you have a family share plan, there is another option to get an on contract moto x. Check out the verizon forum here:

http://forums.androidcentral.com/verizon/227608-instruction-how-keep-unlimited-data-verizon-89.html

Regardless, it's still the best option for someone that doesn't want to go through that hassle of line and upgrade transfers and extending contracts and possible ETFs.

Posted via Android Central App

 

[bigdaddytee]

Agreed. I was going to buy the Galaxy Nexus when it came out, but when I went to the store and saw how flimsy and cheap the plastic back was I decided against buying it. Even though I'm not really hard on my phones, I couldn't imagine that phone holding up for 2 years.

Still rocking my dependable, flimsy, original GNex two years later. I guess cheap is in the eye of the beholder.
You should complain about something important, like the battery. I had to add a 3800 to make it useful.
I may keep this another year, it's pristine and working flawlessly.

Sent from the (4.2 updated) redheaded stepchild of the Nexii