Motorola Mobility has announced that it will shut down the Moto X assembly plant in Fort Worth, Texas, according to a WSJ report.
Motorola CEO Rick Osterloh told the paper, “What we found was the North American market was exceptionally tough.”
Approximately 700 people work at the plant, according to the report. Motorola’s move to start the factory stemmed from Motorola’s desire to have the Moto X, a high-end and customisable smartphone, ready for US customers within four days of their ordering. A similar unit in Asia or other parts of the world, would not have allowed the company to deliver phones as quickly as the US plant did. This also allowed Motorola to give more freedom to users with Moto Maker tool and as a neat bonus, gave the company a good marketing foundation within in the United States, thanks to the Made in USA angle.
A report from after the Moto X launch said the company was shipping out 100,000 Moto X units in a week and had the capacity for tens of millions of yearly orders, but scaling up would depend on demand. Demand was not seen, hence Motorola is shutting it down.
The lukewarm response to the Moto X, a phone we loved dearly, within the United States meant only 900,000 units were moved in the first quarter following its release. Motorola’s competitors such as Samsung, Apple and HTC, besides Google’s Nexus 5, managed to do much better in the same segment as the Moto X. As we have seen over the past year, Motorola has constantly dropped the price of the Moto X since its launch at $549. Now it retails for close to $300 internationally, while in India it’s available for between Rs 20,000 and Rs 24,000, depending on discounts and SKU variants.
With the shedding of the Texas factory, Motorola will likely shift its assembly base back to Asia, where Lenovo, its new owner, has a healthy relationship with supply chains, and production and manufacturing units. This would help them scale up more efficiently for a bigger play in developing regions.
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Nov 23, 2014