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Motorola to Produce Smartphone in the United States

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At the All Things Digital conference held this week, Motorola, now part of Google, confirmed that it will introduce a high-end smartphone to be named Moto X and that it will be produced in the United States. The company will manufacture this device at a facility near Fort Worth Texas, but many essential supply chain components will be sourced overseas. The Texas facility will employ upwards of 2000 people by August.

Our readers are probably aware that the competition between Google and Apple has heated-up, of late. We therefore found this announcement from Motorola to be both significant and “in your face.”

Apple garnered lots of media headlines regarding its December announcement that the company would move some manufacturing back to the U.S…  In a previous Supply Chain Matters commentary we viewed the announcement that Apple will have some Mac production in the U.S. this year as one of political expediency. Apple had been feeling lots of attention regarding the incidents of labor unrest among Foxconn plants in China along with the numerous traditional and social media discussion focused on why the company has stashed hoards of its cash across foreign entities to avoid U.S. taxation.  Apple was also a topic in the past U.S. Presidential debates, with the direct question; “What will you do to encourage companies like Apple to shift more jobs to the U.S.?”  Apple expeditiously responded with its U.S. sourcing announcement, indicating that it would invest $100 million in this effort.  As we approach the mid-way point in 2013, very little detail has come forward regarding Apple’s U.S. production plans.

By our view, the Motorola’s announcement is far more significant because it involves a line of smartphones, one that manufacturing industry interests openly declare can never be competitively manufactured in the United States.  While Motorola has not disclosed specific detail on the features and pricing of the Moto X, the decision to source final assembly in the U.S. is a bold one and far upstages that of Apple.

Motorola may not garner all the media eyeballs that Apple can garner but its bold decision to return some smartphone production to the U.S. is the one to watch in the coming months.

Bob Ferrari

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