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Google Squeezes Margins on Moto G Phone

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Google's operating profit margin on the Moto G smartphone is about 5%, according to analyst Newman at Sanford Bernstein & Co. By comparison Samsung gets a 28% operating profit margin on the Galaxy S4, and Apple gets a 30-35% margin on the iPhone 5S and 5C. Apple and Samsung have a little over $200 in parts and components in the iPhone 5S and the the Galaxy S4, and price their smartphones at about $640, according to TechInsights. Moto X premium smartphone from Google sells for $350 without a contract. Moto G for price sensitive customers has $123 in parts and components and is priced starting at $199. For about $90 in additional circuitry Apple and Samsung are able to command an additional $440 in price level, say experts. Google's Motorola Mobility head, Dennis Woodside, says Apple and Samsung premium smartphone and lower end smartphone prices are too high, without starting a price war Google is lowering prices gradually.

Comparison of profit margins for smartphones Moto G, Galaxy S4, and the iPhone 5S

12/07/2013

The Samsung Galaxy S4 and iPhone 5S parts components cost a little over $200 with the phone price set at about $640. In comparison the Google Moto G has $123 of parts components and is priced at $200. Google has about a 5% operating profit margin on the Moto G, compared to about 28% for Samsung's Galaxy S4.

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