Motorola To Close Texas Smartphone Factory

Google's Motorola Mobility handset unit announced Friday it will shutter its North Texas factory by the end of this year, barely a year after it opened with much fanfare as the first smartphone assembly plant in the U.S.

At the time, Google had explained its surprising decision by saying the location would enable it to fulfill customized, built-to-order devices and deliver them anywhere in the U.S. within five days.

But sales of its flagship phone, the Moto X, have been too weak and the costs of running the plant too high to keep operations going, Motorola Mobility spokesman Will Moss said. Singapore-based international contract electronics manufacturer Flextronics Ltd. operates the plant.

Even though the concept of the smartphone was pioneered in the U.S. and many phones have been designed here, the vast majority of phones are assembled in Asia. The Fort Worth factory has allowed Google to stamp the phone with "Made in the U.S.A.," although assembly is just the last step in the manufacturing process and accounts for relatively little of the cost of a smartphone. The cost largely lies in the chips, battery and display, most of which come from Asia.

The Fort Worth factory employs about 700 workers who assemble the Moto X smartphones for the U.S. market, Moss said. He declined to comment on whether Motorola would retain the workers.

Motorola Mobility will continue to develop the Moto X in Brazil and China, where the costs for labor and shipping aren't as high.

Texas Gov. Rick Perry's office administers a pair of special state funds meant to help attract job-creating businesses to the state, but spokeswoman Lucy Nashed said the Republican governor did not distribute any money to close the Motorola Mobility deal.

Google bought cellphone pioneer Motorola for $12.4 billion in 2012. The Moto X originally sold for $600, but amid flagging...

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