Moto X costs carriers just $350, so the price could drop fast
0. phoneArena 09 Aug 2013, 12:19 posted on
Leo Laporte said on This Week in Google that when the Moto X hits the Google Play Store it will not be a Google Edition device, and will contain all of the Motorola extras. Well, Leo wasn't done with the info, because he has also given some info on what the carriers are paying for the Motorola Moto X, and he gives some guesses about how the pricing will work through carriers...
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1. g2a5b0e (Posts: 3725; Member since: 08 Jun 2012)
Ooooh, I can't imagine it's gonna make many people very happy to hear this news. Verizon, AT&T, & Sprint price gouging? No way!
10. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
I would be surprised if the Bill of Materials for this device was over $170.
This is a very cheap phone to assemble.
31. lola99 (Posts: 33; Member since: 03 Aug 2013)
how in the heck would you know? reports say it's $215 to make, so do you have information to the contrary? do share.
49. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
Your $215 number results in a gross profit margin of about 38.6% (versus my guesstimate of about 51.4%).
After accounting for setoffs and chargebacks, and then accounting for marketing spend, marketing support, (an implied charge for R&D), etc, you aren't looking at a good operating margin number if you believe the $215 number.
So when it doubt, use business sense or common sense.
50. lola99 (Posts: 33; Member since: 03 Aug 2013)
That's why you shouldn't believe the $350. When in doubt, trust the IHS over a rumor.
11. TheLolGuy (Posts: 483; Member since: 05 Mar 2013)
Nah, even other phones like the S4 etc. all have bulk discounts. The only one that doesn't discount as much is Apple and the iPhone, which is why some carriers were reluctant to carry them even though they were so popular. Most Android flagship handsets don't get to sell to carriers like Verizon for full price.
Now having said that, $350 is still a pretty good deal for them, so I'm hoping people boycott the Moto X and have it drop to $99 like it should be.
39. Professor (Posts: 213; Member since: 02 Aug 2013)
Don't worry no one has to resort to boycots for the price to lower soon and fast. With the new phones in the way soon they will have to lower the prices to be able to sell phones or at least to be able to compete in price and sales with the new ones from LG G2, HTC, Sony, and even with the rumored iPhone 5C.
4. roldefol (Posts: 4299; Member since: 28 Jan 2011)
I've said all along that $150 would be a more competitive contract price. Undercut everyone else without making it look like a budget phone.
5. PapaSmurf (Posts: 10457; Member since: 14 May 2012)
Not trying to take a jab at Moto, but even at $150 on contract, they're going to have to market the hell out of their phone. The HTC One and S4 sell for that price (on some carriers) and they're the phones that reps are pushing customers to, along with the iPhone 5.
8. KingKurogiii (Posts: 5711; Member since: 23 Oct 2011)
if the Moto X really does turn such a profit for the carriers then reps will start pushing the Moto X more especially considering how elaborate the Moto Maker stations will be in Carrier Stores.
33. youdug (Posts: 27; Member since: 19 Jul 2013)
you can upgrade to the htc one on sprint for $99.
best buy price matches amazon as long as amazon is the one fullfilling the order, which they are.
even $150 is too much.
if this phone was $99 i would still go with the htc one for the same price.
and you can actually get it for $49 if youre a new customer.
52. roldefol (Posts: 4299; Member since: 28 Jan 2011)
I meant $150 starting price, whereas the One/S4 started at $200 and then got discounted. It's the way Android phones work - early adopters pay a premium and the price drops quickly due to competition.
13. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
The phone came out late, and comes across as a second-class citizen amongst high-end android devices where the current "de rigeuer" are big screens (close to 5" or more) with 1080 display.
I was going through the parts and trying to figure how much it would cost to assemble it, and there's nothing really pricey about this device.
This will be a "budget" phone within a few months. It will just be like the HTC facebook phone -- it will be a poor seller.
17. protozeloz (Posts: 5396; Member since: 16 Sep 2010)
Well... Unlike the Facebook phone this phone has had good reception to the people in US the fact that'd its helping the economy by providing jobs, its enough for many to consider it, what fans disliked was the price tag... But I can see that if they make it to the play store do 400 or less it will outsell the nexus 4
40. Professor (Posts: 213; Member since: 02 Aug 2013)
I have a Nexus 4 and it is still the best phone for the price (without contract).
The only way the Moto-X can outsell the Nexus 4 is if they stop selling the Nexus 4 at the Play store. Because who is going to buy it at the same asking price of the Samsung Galaxy 4 or the HTC One at the Play store?
32. lola99 (Posts: 33; Member since: 03 Aug 2013)
IHS already did that. Ya know, the global market and economic information firm? lol But i'm sure your analysis will be more much thorough. lol.
6. sum182 (Posts: 229; Member since: 19 Nov 2011)
This is where T-mobile needs to pave the way. All carries want to give it that high sticker price to justify the subsidized price, make it seem like your getting a deal like all the others with the contract, "But look how much it is with not contract!"....But since T-mob is done with contracts, they should sell this outright at the lower price point, point it out to everyone (through ads) how absurd it is VZ, ATT, and sprint is for marking up the price so much to justify the 2yr contract price, and start the revolution. When looking at it, if they're paying 350 a phone, sell it ouright for 450, $100 profit....sounds nice to me but i'm not a business man
14. lolrus (Posts: 29; Member since: 18 May 2013)
$100 profit, not including shipping, payroll, etc etc. Lots of other costs besides the actual price of the phone. Which means they have to charge a bit more to make it worth it.
19. kozza3 (Posts: 700; Member since: 17 Oct 2012)
not to mention the service plan they sell with it...
47. ollienightly (Posts: 37; Member since: 23 Jul 2013)
that's off-contract, so wtf are you talking about?
27. PK1983 (Posts: 215; Member since: 08 Aug 2012)
If I were T-Mobile, I would sell it at $350 off contract or $400 subsidized.
Yes I wouldn't make any money on the phone, but getting people into the store on a wireless plan and potentially selling accessories would more than make up for this. In addition it would be a big slap in the face to Big Red, and the Death Star.
7. Mass88 (Posts: 58; Member since: 06 Jan 2012)
So then T Mobile will be offering the best options money wise for this phone then.
9. softfurryanus (banned) (Posts: 232; Member since: 09 Jul 2013)
O snap. This sounds a whole lot better.
12. FoneAddict (Posts: 259; Member since: 05 Jul 2011)
This just proves Moto X is over priced.
26. SellPhones82 (Posts: 569; Member since: 11 Dec 2008)
Well everything we buy is "over priced" if you compare what it actually costs to make, compared to the wholesale/bulk price, compared to the actual retail price that you and I pay.
The iPhone 5 is said to cost $197 to make and the S4 is estimated at $237 per device. Now obviously that does not include R&D, marketing, or even paying the people to assemble them but they still retail around $650 to $750 depending on where you look. So "retail" for the X is about $75 less than other flag-ships but we don't know what the carrier are getting those for.
29. lola99 (Posts: 33; Member since: 03 Aug 2013)
would prove it if you could prove the $350 claim. But i doubt that's true.
15. xoxoGeorges (Posts: 209; Member since: 11 Jul 2013)
They HAVE to drop the price for that kind of device.
It costs as much as flagships