It wasn’t too long ago that Motorola unveiled the Moto G, a less expensive version of the Moto X that is obviously less powerful, but comes at a much affordable price tag of $179 for the 8GB model, and $199 for the 16GB model, but more importantly those are the prices off contract, meaning that if you didn’t want to be tied to any carrier, these are the prices you would have to pay. This means that the phone is pretty affordable, but if Motorola is willing or able to sell the phone at those prices, how much does it cost them to build?
Well according to a recent report in The Wall Street Journal, it has been estimated that the Moto G costs about $123 to build. It should be noted that this price is probably just for components, and that there are other factors that goes into the pricing of the device. This includes marketing, research and development, shipping, and etc., which according to the report, leaves about a 5% operating profit margin for Motorola after taking those into consideration.
Having a profit margin of 5% is pretty low, and this is compared to the likes Samsung and Apple, where high-end flagship devices have an operating profit margin of 28% and 30-35% respectively. We suppose this is how Motorola plans on competing with other companies, and it’s not surprising given that Google subsidizes their products pretty heavily as well.