Motorola is making a profit of $76 on the Moto G, which at $199 is quite the bargain.
An unlocked 16 GB version of Motorola’s Moto G costs just $199, but unlike other devices in this category, the Moto G does not come with antiquated hardware. Far from it, in fact: there is a 4.5-inch 720p screen backed by Gorilla Glass 3, Qualcomm’s Snapdragon 400 SoC that features a 1.2 GHz quad-core CPU, Adreno 305 GPU, 1 GB RAM, 8/16 GB ROM, 5 MP rear and 1.3 MP front shooter and a 2,070 mAh battery.
A teardown by TechInsights showed that it costs Motorola $123 to make a 16 GB Moto G that sells for $199, thereby netting a profit of $76 on a single device. However, it looks like the operating profits for Motorola are at 5 percent, which is quite less considering Apple gets a 30 to 35 percent profit on the iPhone 5S and 5C, with Samsung making around 20 to 30 percent profits on its handsets.
But Motorola does not need to match the numbers put out by Samsung, as that is not the end goal for Google. Google wants Motorola handsets to gain more market share, and that is the objective at hand with devices like the Moto G.
Source: The Wall Street Journal