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Moto G teardown shows that Motorola is making some profit

Posted: , by Michael H.

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Moto G teardown shows that Motorola is making some profit
Usually when a mobile device costs under $200 full price, we would assume one of two things: either that device is filled with cheap technology (like many of the tablets you'll find in the bargin bin at Walmart), or that device is being sold at little to no profit margin (like Nexus devices and Kindle Fire devices). From the announcement, it seemed like the Moto G didn't fall in the first category, and now we're getting to see just what kind of profit margins it is getting.

Research firm TechInsights has done a teardown of the Moto G and made estimates based on the components of the device. From the looks of it, the 16GB Moto G costs Motorola (read: Google, since Google is the one footing the bill) about $123. Motorola is selling that model at $199, which means just $76 of profit on each device sold. 

Sanford C. Bernstein & Co. analyst Mark Newman has estimated that once you add in other costs surrounding a device, Motorola may be making just 5% operating profit on each Moto G sold. For comparison, Samsung tends to make between 20 and 30% operating margin on its devices, and Apple is getting between 30 and 35% on its iPhone 5s and 5c. 

Of course, this is the benefit of being "a Google company", you don't necessarily need to worry about profits on every device as long as you have a plan. And, gaining market share in emerging markets with quality devices is a solid plan. 

source: WSJ

22 Comments
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posted on 06 Dec 2013, 21:40

1. Sesameopen (Posts: 106; Member since: 02 Aug 2013)


Damn...

posted on 06 Dec 2013, 21:51 13

2. kaikuheadhunterz (Posts: 764; Member since: 18 Jul 2013)


All they have to do now is to make it available in lots of countries, and that small profit is definitely worth it

posted on 07 Dec 2013, 02:48

7. taikucing (unregistered)


This phone will come to my country in January. I don't know whether this rumor is true or not.

posted on 06 Dec 2013, 22:52 3

3. alterecho (Posts: 1088; Member since: 23 Feb 2012)


If only they had reduced their margin a bit, to include memory card support, it would have moved a HUGE amount of inventory.

posted on 06 Dec 2013, 23:52 2

4. kanagadeepan (Posts: 701; Member since: 24 Jan 2012)


True... But after purchase by Google, NO single phone made by Motorola will have SD slot, except old cycles like RazrHD series...

posted on 07 Dec 2013, 09:53

16. sgodsell (Posts: 1363; Member since: 16 Mar 2013)


It doesn't matter in today's world if they put a microsd card slot on the phone or not. All Motorola phones now support USB otg. So you can get a USB otg cable for less than $5. So you can plug in a regular USB flash drive and share or stream data directly off the USB flash drive onto the moto g in this case. If you don't like that approach then you can use a small WiFi device like a sandisk connect (I bought mine for $45). This device is roughly the same size as a USB flash drive, but allows you to swap in micro SD cards and can allow up to 8 devices (android, iOS, tablets, PC) simultaneously share or stream files and data wirelessly. Not to mention there are a number of other WiFi storage units out there.

posted on 07 Dec 2013, 00:16 1

5. PeaceB (Posts: 14; Member since: 22 Nov 2012)


Then Google would have to pay microsoft royalities for exFAT and it would raise prices a lot..

posted on 07 Dec 2013, 05:47 1

8. boosook (Posts: 1068; Member since: 19 Nov 2012)


Oh, God! Every time Google releases a new phone someone complains about the non-removable battery and the lack of an SD slot... didn't you understand that google will never make a phone with removable battery and will never put an sd slot? Every time… c'mon! People don't care!

posted on 07 Dec 2013, 07:00

10. fanboy1974 (Posts: 1261; Member since: 12 Nov 2011)


I know what you mean. It's been like this for over a year and people are still complaining.

posted on 07 Dec 2013, 07:32

11. alterecho (Posts: 1088; Member since: 23 Feb 2012)


" Every time Google releases a new phone someone complains about the non-removable battery"
No one in this thread did.

"and the lack of an SD slot."
Only suggested it would have been better. You deny that it would have been better, if it had an SD card?

"didn't you understand that google will never make a phone with removable battery and will never put an sd slot?"
This is Motorola we are discussing. Not a Nexus.

posted on 07 Dec 2013, 09:44 4

15. corporateJP (Posts: 1710; Member since: 28 Nov 2009)


I care, so do a lot of other people.

Go to CNET and see their articles on this subject and read their large comment section.

Pull your moronic opinion out of the mix and see this for the real-time problem it is:

1. No SD card slot means if you start going to town, now you have to go to the cloud. Cloud storage uses data, and sometimes WiFi isn't available, so now I'm using network data that may be limited or cost me more. Cloud data is only free to a certain amount, after that you have to pay for additional space. Cloud data is also open to be mined or is able to be violated.

2. Removable batteries were taken away so you are forced to buy a new phone or pay a huge amount of money to have the proprietary battery replaced, nothing less, nothing more. Another shameless money-grab. People like me that use our phones for longer than carrier contract cycles are a threat to carriers and manufacturers both. Plus, a lot of people forget about power users who can't rely on the lousy usage times these batteries give you on LTE and carry an extra battery with them.

Get over your self righteousness.

posted on 07 Dec 2013, 10:04

17. sgodsell (Posts: 1363; Member since: 16 Mar 2013)


Granted cloud storage is not available and you might not have access to WiFi. But there is things like USB otg cables ($5 or less). So you can use regular USB flash drives. If you don't like that, then you can look at a wireless storage solution like the sandisk connect ($45) that you carry with you. Its no bigger than a USB flash drive, and allows interchangeable micro SD cards. You don't even have to take it out of you pocket or bag to use it, and it supports up to 8 devices simultaneously connecting to it (iOS, android, tablets, PCs).

posted on 07 Dec 2013, 21:38 1

19. corporateJP (Posts: 1710; Member since: 28 Nov 2009)


You must work for some company that maintains servers for Google or Apple or whoever.

Because, all this BS you just shot off is so much easier than just putting an SD reader onto a phone.

I'm waiting for your solutions to handle the removable battery dilemma. Maybe you want me to carry around a 5'x 5' solar panel and a 6' USB cable?

Plain and simple, any company that gives me a phone with an SD slot and a removable battery has my business.

posted on 07 Dec 2013, 21:39

20. Blazers (Posts: 237; Member since: 05 Dec 2011)


A non-removable battery probably makes life easier for the NSA.

posted on 07 Dec 2013, 02:28 3

6. AhmadAlsayegh (Posts: 254; Member since: 18 Jul 2011)


I ordered mine from the UK, took one day to ship to Bahrain by DHL..
feedback on the phone:
*A one hand device, which is exactly what I was looking for, like the iPhone, they decided to make the phone taller to fit one hand use, and I am not even mad..
*Nice screen, but somehow I manage to notice the pixles, even though it is 720!!
*I have both the Moto G and the Lumia820, I still feel the 820 has a better build quality
*Camera is crap, but I am not a camera guy anyway, sometimes I wish phones did not have cameras
*Battery is amazing!!
*Sometimes I feel it is a bit sluggish, my WP8 is way smoother...but I paid only 119GBP for it anyway
*Notification light is only white! but i can live with that considering that I am coming from WP and I dont have that
*Almost naked Android, no bloatware
*Good speaker
*Back cover is finger print magnet
*Free quick office for those who care..

Now moto should make us wooden back covers for the G

posted on 07 Dec 2013, 08:40 1

13. taikucing (unregistered)


At this price, Moto G is still better than Lumia 520 & the upcoming 525.

posted on 07 Dec 2013, 08:59

14. kaikuheadhunterz (Posts: 764; Member since: 18 Jul 2013)


Well, unless you can only afford the Lumia 520/525

posted on 07 Dec 2013, 10:34

18. sgodsell (Posts: 1363; Member since: 16 Mar 2013)


You said you notice the pixels on the moto g screen. Well an iPhone which has a retina display has a pixel density of 326ppi. The moto g has a pixel density of 329ppi. The lumia 820 has a 800x480 resolution display giving it a pixel density of 217ppi. For a lumina 820 you pay more than double the price of a moto g. The only thing better on the 820 is the camera. But everything else is better on the moto g. The moto g even has a water resistant coating. All lumias less than the 820 including the 810, 720, 625, 620, 520. All have a resolution of 800x480. The moto g screen is much better at a resolution of 1280x720. If people are worried about storage like a SD card that the lumias have. Then the money they saved by purchasing a moto g, they can purchase now a WiFi storage device like the sandisk connect. You can even swap micro SD cards on the sandisk connect. You are future proofing your storage needs, because you can use the WiFi storage on other devices and other platforms.

posted on 08 Dec 2013, 15:41

21. Landmarkcm (Posts: 459; Member since: 11 Aug 2009)


Just curious what about the camera specifically would make you say it's crap ? because I have read so many mixed things abt the camera on the g. I know mp is not everything (although 5mp is the min I now expect) but the reason I ask is because I have seen some great shots at least to me that were taken on the g & I have noticed a big difference for example in the 5mp that Samsung puts on there shooters vs LG's 5mp camera on there phones . Lg's seem to be alot more Grainy and Samsung processes the photos more smooth. Im hoping the G is on the smooth side..? If the flash is as bright as the X is too it should be fine for my use. In other words it would have to be really bad fo rme to not to like it. I have read that you do have to pay more attention to the settings on the g sometimes to get a good shot.. Would you say its on the better side for the range..? I guess the hdr mode on it really helps too.

posted on 07 Dec 2013, 06:56

9. youngzqw (Posts: 1; Member since: 07 Dec 2013)


what a pity.moto x is not sold in my coutry.but i hear a rumor that this motorola device will come to hongkong soon!

posted on 07 Dec 2013, 07:43 1

12. b1acktiger (Posts: 210; Member since: 19 May 2012)


5% profit ? Motorola can sell -5% from the cost. Google has a lot of money to spend.

posted on 09 Dec 2013, 21:08

22. grammystown (Posts: 1; Member since: 09 Dec 2013)


Hey, The fusion 2 my be cheap and a long battery life but try and keep the keys, air clips and such away form the back, it will pick up any thing metal around it, it has a raw magnet in the back by the speaker and I just don't think I would like that by my head for to long of a time , cancer and all that, you-know? yes, Att knows all about too!

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