Google’s Motorola Mobility handset unit announced Friday it is going to shutter its North Texas factory via the top of this year, barely a 12 months after it opened with so much fanfare as the primary smartphone assembly plant in the U.S.
At the time, Google had defined its shocking resolution with the aid of saying the positioning would allow it to satisfy custom-made, constructed-to-order gadgets and deliver them anywhere in the U.S. inside 5 days.
However gross sales of its flagship cellphone, the Moto X (overview photos), had been too weak and the costs of working the plant too excessive to maintain operations going, Motorola Mobility spokesman Will Moss said. Singapore-primarily based global contract electronics producer Flextronics Ltd. Operates the plant.
Although the idea that of the smartphone was pioneered in the U.S. and plenty of telephones have been designed right here, the overwhelming majority of phones are assembled in Asia. The fortress worth manufacturing facility has allowed Google to stamp the cellphone with “Made in the us.” although meeting is just the last step within the manufacturing process and bills for rather little of the price of a smartphone. The price generally lies in the chips, battery and display, most of which come from Asia.
The castle value factory employs about seven hundred employees who gather the Moto X smartphones for the U.S. market, Moss stated. He declined to touch upon whether or not Motorola would maintain the workers.
Motorola Mobility will continue to develop the Moto X in Brazil and China, where the costs for labor and delivery don’t seem to be as high.
Texas Gov. Rick Perry’s place of job administers a pair of different state dollars intended to help appeal to job-growing companies to the state, but spokeswoman Lucy Noshed mentioned the Republican governor did not distribute any cash to close the Motorola Mobility deal.
Google bought cell phone pioneer Motorola for $12.4 billion in 2012. The Moto X at the beginning offered for $600, but amid flagging gross sales, Google dropped the retail worth to $399. Still, Google offered simplest a fraction of the units within the first quarter of 2014 when compared with the Apple iphone. The common selling price globally for a smartphone in 2013 used to be $335, in line with Massachusetts-primarily based researcher global knowledge Corp.
Nonetheless, Google pronounced its Motorola mobile segment generated $four.4 billion in sales in 2013, a 13 percent elevate over the previous 12 months.
The announcement of the plant closure comes 4 months after Google mentioned it planned to promote the Motorola Mobility smartphone business to Hong Kong-primarily based pc maker Lenovo for $2.9 billion. The sale is predicted to shut via the top of the yr., according to a submitting with the Securities and alternate commission.
Moss mentioned Lenovo’s acquisition of Motorola Mobility and the closing of the manufacturing facility weren’t related.
San Francisco-based web analyst Kerry Rice of Needham & Co. Stated Google bought Motorola extra for its patents than its manufacturing capability.
“They wished to present it a go as far as constructing within the U.S., but it was once most certainly a stretch for them to take that on. Manufacturing is just not their core competency and by no means has been,” he said.