Moto X costs carriers just $350, so the price could drop fast

Moto X costs carriers just $350, so the price could drop fast
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.

According to Leo, the carriers are paying just $350 per device on the Moto X, which is less than carriers would usually pay on a device that has a full retail price of around $575 (according to leaks). This not only means that carriers are making extra profit on each device, but it does mean that if the launch price of $199 doesn't go over well, the price could drop fairly quickly. 

We still think the Moto X is worth the $199 on-contract price tag, but with more flagship devices on the way, this could give the Moto X an advantage going into the holiday season, especially if the Moto Maker options will be expanding to other carriers in early November. 

Of course, despite what many of you may think, there is still almost no chance that the Google Play Store will undercut the unlocked pricing by carriers when the Moto X is sold through Google. Google/Motorola still need to retain a good relationship with carriers, so we would expect the Google Play pricing to be similar to the $575 off-contract that has been rumored for carriers. 

source: Leo Laporte

Related phones

Moto X
  • Display 4.7" 720 x 1280 pixels
  • Camera 10 MP / 2 MP front
  • Processor Qualcomm Snapdragon S4 Pro, Dual-core, 1700 MHz
  • Storage 16 GB
  • Battery 2200 mAh(13h talk time)

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54 Comments

1. g2a5b0e unregistered

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: Apr 16, 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: Aug 03, 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: Apr 16, 2011

lola99: 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: Aug 03, 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: Mar 05, 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: 223; Member since: Aug 02, 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.

2. PootisMan

Posts: 266; Member since: Aug 02, 2013

I hope thus is true.

21. gazmatic

Posts: 822; Member since: Sep 06, 2012

i liked thus better

3. PootisMan

Posts: 266; Member since: Aug 02, 2013

This*

4. roldefol

Posts: 4745; Member since: Jan 28, 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: May 14, 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: 5713; Member since: Oct 23, 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: Jul 19, 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: 4745; Member since: Jan 28, 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: Apr 16, 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: Sep 16, 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: 223; Member since: Aug 02, 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: Aug 03, 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: Nov 19, 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: May 18, 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: 778; Member since: Oct 17, 2012

not to mention the service plan they sell with it...

47. ollienightly

Posts: 37; Member since: Jul 23, 2013

that's off-contract, so wtf are you talking about?

27. PK1983

Posts: 215; Member since: Aug 08, 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: Jan 06, 2012

So then T Mobile will be offering the best options money wise for this phone then.

9. softfurryanus

Posts: 232; Member since: Jul 09, 2013

O snap. This sounds a whole lot better.

12. FoneAddict

Posts: 263; Member since: Jul 05, 2011

This just proves Moto X is over priced.

26. SellPhones82

Posts: 569; Member since: Dec 11, 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: Aug 03, 2013

would prove it if you could prove the $350 claim. But i doubt that's true.

15. xoxoGeorges

Posts: 209; Member since: Jul 11, 2013

They HAVE to drop the price for that kind of device. It costs as much as flagships

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