Motorola released a new ad this week, announcing the upcoming launch of its first flagship smartphone, the Moto X. The leitmotif of this ad is the fact that it is the first phone designed and assembled in the US. For anyone who misses the obvious, the ad was released on time for July 4th, the most patriotic day of the year.
What weight does this carry? Kind of a lot. The US is a country with 150 million smartphones, however none of which has been produced onshore. Motorola wants to change this with the Moto X. To the untaught spectator, this looks like a simple shift of production resources from foreign to domestic shores, yet there is much more to it than just a change of location.
For the US economy, this is an essential contribution to economic growth. For every $1.00 spent in manufacturing, another $1.48 is added to the economy, the highest multiplier effect of any economic sector (source). By the way, manufacturing is currently supporting 1 in 6 jobs in the private sector in the US, which equals a total of 17 million (source). As Motorola CEO Dennis Woodside mentioned in a live interview at All Things D (source), the phone will be produced by about 2,000 people in Fort Worth, Texas. Hopefully, this is setting a precedence with many other companies to follow.
Is this a simple marketing gag or what else is there behind it for Motorola? The benefits might not be that obvious, but having designers and engineers sitting close to the actual manufacturing facilitates a lot of collaboration opportunities as the communication chain is shortened. Think of shorter iteration cycles in design. Think of being closer to the customer. Think of faster fulfillment from e-commerce (yes, also think of the Nexus 4 shortages earlier this year). The benefits for Motorola are huge. Especially since the old player with the new name is entering the game between Apple and Samsung.
I mentioned earlier that I hope that other companies would follow this onshore example, however, the reality of doing so is pretty difficult. A smartphone has over 1,000 individual components. That, by itself, is a huge layer of complexity in the production. Now imagine that all of this has to be made in a location that does not have the capacities to do so. Why? Because no one has ever assembled a smartphone on US territory before. You need strong local Partners (no more Foxconn in Asia), a good location (in this case a former feature phone production facility by Nokia) and a ton of qualified people to do the job.
In summary, Motorola is really trying to pull of something new that goes beyond mere Marketing. The promised benefits seem to be on the side of the customer. The ad talks about a phone that is "Designed by You". While it's hard to imagine what this exactly means, the shorter communication lines that will benefit the design iteration cycles, let you already phantasize about the possibilites it will bring. May this be the first phone in a successful series of many. Not only for Motorola, but also for the US economy and the domestic mobile manufacturing industry.