Motorola Mobility announced last week that it will be closing its Texas plant by the end of 2014. The factory has been in operation for just over a year, and it was originally reveled as the first smartphone assembly plant in the United States.
The primary reason behind the plant shutdown is the fact that sales of Moto X, its flagship phone, have been weaker than expected. The Fort Worth plant costs more to run than the phone sales will support, so the factory must close to keep its head above water.
The big promise with the new Motorola plant in Texas was that any American could order a completely customized smartphone that would be assembled and delivered within five days. Now that assembly will have to be moved elsewhere, consumers are left to wonder whether Motorola will be able to uphold that promised timetable.
This all comes merely four months after Google announced that it would be selling its Motorola Mobility branch to Levono for $2.9 billion. Google acquired Motorola Mobility in 2012 for $12.4 billion, and in 2013, it generated $4.4 billion in sales, up 13% from the previous year.
Kerry Rice of Needham & Co. said Google purchased Motorola for its patents, not necessarily its production capabilities.
“They wanted to give it a go as far as building in the U.S., but it was probably a stretch for them to take that on. Manufacturing is not their core competency and never has been.”