First US-Made Smartphone Costs Less to Manufacture

Motorola’s new Moto X phone, released late last month, is causing quite a stir. Not because of its sleek design and no-touch technology, but because it’s the first smartphone ever to be designed and assembled in the United States, and for less cost than other smartphones.

The phones are built in a 500,000 square-feet facility in Fort Worth, Texas, a factory that’s created 2,000 new jobs for Americans. According to reports, the Moto X is also about five percent cheaper to make than Samsung’s Galaxy, and just nine percent more than Apple’s iPhone 5.

But it’s the “Made in the U.S.A.” designation that will really help to win hearts and minds.

A recent survey from the Consumer Reports National Research Center finds that given the choice between a product made in the U.S. and an identical one made abroad, 78 percent of Americans would rather buy the American product.

An overwhelming majority of those surveyed by Consumer Reports also said that retaining manufacturing jobs and keeping American manufacturing strong in the global economy were the most important reasons for buying American.

But we have to be careful with the “Made in America” label, especially when it comes to electronics. According to IHS experts who reviewed the Moto X, it’s not all cut-and-dried.

The phone uses memory made by Samsung Electronics and SK Hynix, both based in South Korea. Samsung also makes the Moto X’s screen.

Qualcomm supplies several of the parts inside the Moto X, including chips that connect to cellular networks, run software, and manage sound processing and access Wi-Fi. Qualcomm is based in San Diego and designs its chips in the U.S., but it outsources production to Taiwan Semiconductor Manufacturing and GlobalFoundries, a contractor that’s wholly owned by the Abu Dhabi government.

According to IHS, Moto X’s accelerometer, microphone and near-field communications chips are all probably made outside of the U.S. too, leaving only about 15 percent of the phone that’s truly sourced and manufactured in the U.S.

To be fair, Motorola claims only to have designed and assembled the Moto X on American soil, not to have sourced and manufactured all the components there too, and it’s not positioning itself as an American hero. Rather, it says, assembling the phones in the U.S. allows it to be close to its consumer base – American customers can personalize their Moto X online and have it shipped to them in four days.

Photo credit: DON EMMERT/AFP/Getty Images

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