The Motorola Moto G has created quite a buzz in developing markets ever since its launch. That’s because the smartphone is sold for a meager $199 off contract with a more than capable hardware. But according to reports, Motorola isn’t making a lot in terms of profits with each unit sold. Some peg the profit margin to be as low as 5% which is remarkably low for a device of its caliber. Some other reports claim that the Moto G costs close to $123 to manufacture, which translates roughly to a margin of $76 which isn’t all that bad for a midrange smartphone.
However, the additional costs involved such as retailer margin and marketing expenses brings down that margin substantially. But it’s imperative that Motorola makes some profit out of the Moto G with every unit sold. Chinese manufacturers are known for their unusually low profit margins, so it comes as a surprise that a company like Motorola offers smartphones at such low profit margins, especially considering the horrendous couple of years it has been having.
Source: The Wall Street Journal
Via: Talk Android