Sunday, June 1, 2014

Google to close Motorola smartphone factory in Texas

Google's Motorola Mobility has said it will close its Fort Worth, Texas factory after its Moto X smartphone failed to appeal to consumers.
The facility - which is the only smartphone factory in the US - opened in May of last year.
At its peak, the factory employed 3,800 people, although now only 700 workers remain.
In January, Google said it was selling the Motorola Mobility unit to Lenovo for $3bn (£1.8bn; 2.2bn euros).
That deal is expected to close later this year.
When the Texas plant opened last year, Motorola said it was aiming to challenge the conventional wisdom that manufacturing advanced electronics products like smartphones in the US would be too expensive.
However, poor sales of the Moto X smartphone in the US - which initially retailed for $600 before the price was dropped to $399 - made it difficult to justify the higher costs of the plant.
According to research firm Strategy Analytics, the company sold 900,000 Moto X smartphones worldwide in the first three months of 2014.
Motorola says that the Moto X smartphone will still continue to be manufactured at plants in China and Brazil.
Was this the best course of action for Google?


  1. If the production costs are too higher in comparison to the revenue, the company would have closed at some point in time. The countries that they are moving the production operations to have lower wages and a different standard of living in comparison to the U.S. I think this was a good course for Google.

  2. I think this was definitely the correct move for Google. I think this also highlights the tradeoffs of higher minimum wages (see the Seattle blog port). While a higher minimum wage can increase the standard of living, it also increases business costs, which can drive production away from the U.S.