The curious Moto X pricing

Posted on Friday, 2 August 2013

Comparing the Moto X to the Nexus 4 is interesting in one particular respect - the price.

The Nexus 4 (made by LG, sold by Google) had very respectable specs when it was launched, but its price was surprisingly low ($300 off contract). We were told this was because it was being sold very close to cost price.

The Moto X (made by Motorola, which is owned by Google) has mid-range specs, but its price is surprisingly high ($200 up front *and* an expensive two year contract).

Overall Motorola is probably getting something like $400-$600 for each Moto X sold, when you factor in the carrier subsidy.

The inevitable question is why Google is happy to make almost no money off the Nexus 4, but wants to have its Motorola division make a respectable margin on the Moto X.

  • Is it because doing otherwise would undermine the carriers' abilities to sell other phones, so they would refuse to do it?
  • Is it because Google wants the Motorola division to look good in their accounts, which is easier if you are selling mid-range phones for the kind of money that an iPhone sells for?
  • Something else?


Leave a response