Moto G Costs Motorola $123 To Build [Report]
Motorola’s first scaled-down Moto X variant, the Moto G, has been in the headlines a lot recently, mainly for its impressive hardware coupled with its very appealing budget-friendly price tag. The Google-owned company is selling the 16GB version of the smartphone for $199 in the U.S. off contract, but have you ever wondered how much the handset costs Motorola to build? If so, then wonder no more.
According to a recent report by The Wall Street Journal, the Moto G costs Motorola $123 to build. Once the manufacturing price has been added to the other expenses required to get the phone on the market, the profit margins decrease rather dramatically, but analyst Mark Newman still firmly believes that Motorola has an operating profit margin of about 5% for the Moto G.
The Sanford C Bernstein & Co analyst also suggested that Samsung’s mid-tier smartphones have an operating profit margin of about 20% and some of its high-end flagship smartphones operate on around a 28% margin. Whereas, Apple is estimated to be operating with profit margins of 30% – 35% for its iPhone 5c and iPhone 5s smartphones.
It’s believed that Motorola’s competitive pricing is putting a lot of pressure on other well-known manufacturers, but its budget-friendly strategy appears to be affecting Samsung the most, as the South Korean market leader has traditionally made its primary goal to create relatively impressive affordable handsets for the general public.
Will Samsung continue to rule the entry-level device market or will it be pipped at the post by Motorola? I guess we will just have to wait and see.
- SourceThe Wall Street Journal