Will Motorola Gain an Edge With Phones Assembled in the USA?
Motorola Mobility is looking to gain a home team advantage. As a press release put out by the company explains, today there are more than 130 million smartphones in use in America and not one of them was made or assembled here. That is about to change as Motorola announced this week that it is opening a plant in Fort Worth, TX where the company will employ up to 2,000 individuals to assemble 70 percent of its new Moto X flagship smartphone.
The company said it would benefit by moving product assembly of the Android device closer to its engineers based in California and Illinois. According to a company statement, Motorola will "be able to iterate on design much faster, create a leaner supply chain, respond much more quickly to purchasing trends and demands, and deliver devices to people here much more quickly."
Motorola’s move follows an announcement last year that Apple planned to move manufacturing of some Mac computers to the U.S. this year. Apple CEO Tim Cook has said the company would like to bring some iPhone production to the U.S., as well. Other electronics manufacturers including Hewlett-Packard and Lenovo also do some assembly at domestic plants.
- Moto X: The First Smartphone Assembled in the USA – Motorola Mobility LLC
- Dennis Woodside on the Genesis of the Moto X, Ditching Tablets and Learning to Say No – AllThingsD
- Motorola Opening Nation’s First Smartphone Assembly Plant – The Associated Press/CBS News
- Motorola’s Moto X phone to be made in the U.S. – CNN
- Motorola’s Moto X Phone Will Be Made in America – ABC News
Discussion Questions
What advantages, if any, can electronics companies gain by having manufacturing and/or assembly plants in the U.S.? Will being U.S. based have an effect on sales in the consumer or business markets?
You can fool all of the people some of the time and some of the people all of the time …
Some people will read “Assembled in America” and patriotically purchase products.
Others … well they’ll realize that probably means the product was put together in America using parts made almost anywhere else.
I guess assembly is better than nothing, but the first news story that documents the percentage of parts made in China or wherever in those “America Assembled” products might just take the wind out of these particular marketing sails.
As a big proponent of “Made in USA” I for one applaud this move. I think many Americans will support it as well—in theory. However, I doubt that more than a handful of people have factored where their mobile device is produced when making a purchasing decision. Most people search for mobile devices based on the wow factor, the coolness of ownership, price(!), and carrier plan. If there’s no added cost for the American made products and they can compete on the other factors, I imagine they will do as well as any competitive foreign made product, but I doubt there will be any noticeable lift in sales solely based upon its country of manufacture. Unfortunately.
As noted in Motorola’s statement, closer proximity to design and engineering resources can certainly be valuable in terms of “speed to market,” but also maintaining much tighter control of intellectual property and its implementation.
From a marketing point-of-view, any product or service that can promote “Made in America” will resonate with the American shopper. Menard’s has used this promotion effectively in its television spots.
Given the the slow recovery from a terrible economic cycle that affected everyone, American shoppers identify with the fellow consumers and their need for employment. It is however imperative that these American brands design, manufacture and deliver an exceptional product with the highest quality and customer service to warrant the higher prices. If not, consumers will return to the cheapest alternative.
Built in the USA is a great slogan, but the two things that are going to make a difference to most consumers is how good a fit the phone is for their needs and what it costs. If the advantages Motorola touted don’t have a positive impact on one or both of those, being made here will not increase sales.
In most business today it’s a case of BYOD so the fact that the company has a preference for buying goods manufactured in the US will have little to no impact on what phones their employees use for work.
I think Americans will appreciate any mobile phone that is made in the USA and creating jobs for Americans. The word of mouth marketing, the entire supply chain and the local community will have a sense of loyalty like Detroit would have for the cars they built.
In some ways, it may be interesting if we discover that the world, including China’s wealthy, would have a high demand for American-made mobile phones.
This is a positive start for US workers, and I hope that the trend will continue. Our creative process is the best in the world, and if the workers and management get along, it is a win win for all of us.
It is a start. Now that Motorola shows that it is also neater, better made, and price competitive, it will make a real statement that will resonate and tell a story about what we can build in this country, and compete with the rest of the world.
Dispersed throughout the Costs Of Goods Sold (COGS) is the effects of energy on sell price. The early effects of a world economy are making this once insignificant factor much more noticeable. The quickest way to force price increases is to have an impact on any of the significant cost factors. Energy costs have risen to levels that changes of a couple of percent are weighing heavily on all finished goods costs, and are now the largest contributor to inflation.
Buying energy commodity futures is beyond a little risky and has put whole companies out of business fast. A quick review of the airlines industry will quickly support this. So are energy costs a controllable cost factor that is causing manufactures to move back to the USA from overseas? In this discussion, much has been implied about the cost of fuel having an effect on prices to the extent that it is necessary to bring production closer to the strongest markets. I am not so sure about that. Reflecting on the recent past and several delays as well as shipment of defective finished goods in the electronics market from far abroad has me wondering if it might be something else.
Moves like this are made quickly due to hostilities that exist within the market area of production. Areas of concern like production halts, quality of workmanship, unanticipated license and tax fees, and substandard labor pool resources that become inevitable interruptions in spite of any and all attempts for a cure will force ownership to make whole moves as we see here.
So, as for energy costs are concerned, the price is the price. Being embarrassed like Apple was in Asia and Walmart was in Latin America is an unnecessary cause for concern that for many reasons must be stopped for the sake of the entire company. The simple solution is to quickly “Get Out Of Dodge” to somewhere safe as we see here. But that’s just what I think.
With the possibility of unforeseen geopolitical events disrupting a lengthy supply chain, moving assembly closer to the end-consumer is probably a good idea. Long-distance management of operations can also add costs and complexity that Motorola may be looking to reduce. The on-shoring of manufacturing jobs could also give Motorola a positive PR message to spin with its customer base.
I don’t think point of assembly will make any real difference to the American consumer. It hasn’t proven to be a factor in any other category. What will matter is the performance of the product. As this one is operating on the “Open” android platform then the buggy app world of android isn’t going to help any, and staying ahead of Samsung will be a bigger problem.
The smart phone world grows on reputation and cachet; Motorola lost theirs when they failed to capitalize on the RAZR and regaining share is going to be impossible in the face of competition. Businesses, like consumers, buy what works and what is secure. Unless reliability and security is a huge part of this venture, it will be but a very small blip on the employment charts.
“Made in America” is a nice slogan, but it hasn’t ever kept a consumer from buying the less expensive or better products. Moto X will sell if it provides the attributes that the user wants at a price they are willing to pay. In reality, “Made in America” is irrelevant to the consumer.
Perhaps with the right financial incentives, Motorola can make this work. Texas – no income taxes and cheap immigrant labor, makes sense. In Harvard, Illinois we have big white elephant Motorola plant that was suppose to employ 20,000 people. I think they got up to 6,000 or 7,000 people and then the market changed. Illinois is also a high tax, high labor cost state. I really do not see how the location of the manufacturing facility will change consumer behavior.
Tout the 2K jobs created. It will get people to look at it and evaluate against their current smart phone. apple is tough to displace, but it can be done.
Interesting how many RW people read, “assembled in America,” as being the same thing as “made in America” even though they are clearly distinct claims.
Maybe the campaign will be more effective than I thought.
Absolutely love the fact that Google acquired Motorola Mobility last year and is investing in the first smartphone assembly plant in the U.S.
The Moto X smartphones that are assembled at this plant in Fort Worth, TX are expected to hit the market next Fall and compete head-on with the iPhone and Samsung S4.
This smartphone assembly plant is a significant strategic investment in many ways. First, technology production and assembly positions are created. Second, moving production closer to engineers expedites design development and product updates. Third, product is closer to customers for faster and easier delivery.
Lastly, the ability to respond quickly to purchasing trends and demands is essential and should give a nice edge over the competition.
This appears to be more of a PR move than one motivated by sheer iteration speed and operational efficiency. That being said, it could definitely have a positive effect on sales because of this PR move.