Advised on modern smartphone manufacturing in the U.S., with experience from over a decade back
In 2013, Motorola made a bold move by producing the Moto X smartphone in Fort Worth, Texas. The company allowed consumers to customise certain details of the phone, such as the colour of its buttons and back panel, and promised quick turnaround times. However, the experiment in domestic production was short-lived.
By May 2014, Motorola confirmed plans to shut down the factory and assemble the phone elsewhere due to high production costs, low sales, and difficulty finding skilled labour. Despite the ability to assemble phones domestically, the majority of the phone's components were still sourced from Asia, making the American assembly only a small part of the cost structure.
Sales were lower than expected—only about 500,000 units sold in Q3 2013—and the company faced challenges in maintaining a skilled workforce capable of the precise, detailed work required for smartphone assembly. The scattered supply chain and high labor costs ultimately made US manufacturing unsustainable, leading to the factory's closure and relocation of production overseas.
The factory employed up to 3,800 people at its peak but dropped to around 700 before closing. Motorola’s CEO at the time noted that jobs involving fine motor skills were difficult to fill in the US, as many workers preferred easier or more familiar jobs. Experts have suggested that attempts by other companies to replicate US phone manufacturing should consider these challenges, including labor shortages and the need for automation.
Tech startup Purism makes its Liberty phone in America, but it's significantly smaller than Motorola, which was assembling roughly 100,000 phones per week from its Texas facility. The US manufacturing sector lost an estimated 11,000 jobs between June and July, according to the US Bureau of Labor Statistics.
In contrast, China employed roughly 123 million people in manufacturing in 2023, the most of any industry, according to the country's fifth economic census published in December 2024. Apple's Zhengzhou facility in China, where iPhones were assembled at a rate of roughly 350 per minute in 2016, is a sprawling manufacturing site. Apple has shifted a portion of its manufacturing to India and Vietnam to reduce its reliance on China, making India the top exporter of phones to the United States for the first time.
China's approach to developing the talent required to fill manufacturing jobs is different from the United States, where technical training and vocational education vary based on the state or the industry. A workforce is as important as electricity and transportation infrastructure to a manufacturing strategy, according to Sujai Shivakumar, director and fellow at the Center for Strategic and International Studies.
President Donald Trump is currently pressuring Apple and Samsung to make their mobile devices in the US or face tariffs, with higher levies on imports from China set to take effect on August 12. Woodside emphasised the need for a strong value proposition for employees and careful use of automation to remain price competitive in the market.
Despite the challenges faced by Motorola, the company's attempt to build smartphones in the US at scale may be the only attempt of its kind. Smartphone assembly often requires a lot of dexterity to mount small components like camera parts and chips onto a device, making it a precision job that requires skilled labour. As the market continues to evolve, it remains to be seen whether other companies will follow in Motorola's footsteps and attempt to bring smartphone production back to the US.
[1]: Motorola to shutter Fort Worth factory that assembled Moto X [3]: Motorola's Moto X factory closing: A look at the challenges of building smartphones in the US
- The high production costs, low sales, and difficulty in finding skilled labor led Motorola to close its Fort Worth factory, which assembled the Moto X, signifying the challenges of manufacturing smartphones in the United States.
- In contrast, China, with over 123 million people employed in manufacturing in 2023, has been successful in developing a workforce capable of the precision work required for smartphone assembly, making it a competitive location for companies like Apple and Samsung.
- Despite the attempt by Motorola to build smartphones in the US at scale, the precision nature of the job and the lack of a strong value proposition for employees have made it difficult for other companies to follow in their footsteps, raising questions about the future of US smartphone manufacturing.
