Google to close American Motorola smartphone factory

Motorola logoA year ago, Google proudly announced that its new Moto X smartphone would be built in the US. It fitted out a factory near Fort Worth, TX and claimed that the facility would make for a "leaner, more efficient" operation. It looks like those efficiencies haven't materialized, with the Wall Street Journal reporting that the factory will be closed by the end of the year.

The $600 Moto X was aimed at American buyers. Motorola President Rick Osterloh told the Journal that the company had found the North American market "exceptionally tough," however. Mark Randall, Motorola's senior vice president for supply chain and operations, said that poor sales of the Moto X prevented the company from achieving economies of scale and that both labor and shipping costs in the US were higher than they would be overseas. At its height, the plant employed more than 3,800 people to build Moto X phones. Currently, that number is around 700.

Since the launch of the premium-priced Moto X, the company has switched to a new strategy of selling midrange phones at bargain prices, such as the new $129 Moto E and $179 Moto G.

These devices have found their greatest success in non-US markets, meaning that the Forth Worth plant's advantage—a shorter time between device configuration/assembly and getting it in the customer's hands—was no longer relevant.

Osterloh said that the decision to close the plant was independent of Google's decision to sell Motorola Mobility to Lenovo for $2.9 billion. That deal is expected to close later this year.

Source: Ars Technica

Tags: Google, Motorola

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