Trump demands that iPhones be produced in the US, Google once tried to do this with Motorola – here's what its history teaches

Donald Trump has repeatedly demanded that Apple move iPhone production to the United States, threatening to impose a 25% tariff on the company if it does not do so. However, Apple already has an example of Google's almost forgotten attempt to organize the production of Motorola smartphones in Texas 12 years ago. Fortune recalls how this story ended, and what conclusions Apple can draw from it.

In 2013, Google-owned Motorola Mobility launched a bold experiment: manufacturing the Moto X smartphone at Flextronics’ plant in Fort Worth, Texas. The company’s executives argued that this would prove the feasibility of making smartphones in the United States, despite concerns about high costs and a lack of flexible labor.

The project initially seemed like a success. The factory, located in a former Nokia building, had nearly 3,800 workers at its peak, assembling tens of thousands of customized Moto Xs each week. Users could choose from dozens of colors and back materials, including bamboo and walnut, add engraving, and receive their phone within four days—a competitive advantage over standard models from Apple and Samsung.

However, the deal fell through in less than a year. In 2014, Google sold Motorola to Lenovo and closed the factory. The Moto X failed to gain traction, despite its innovative features and customization options.

Key lessons from Google's short American manufacturing experiment:

• High labor costs. Factory workers were paid three times more than in China. Although Motorola made a profit from customized models, low demand destroyed economies of scale;
• Infrastructure gaps. Motorola was unable to find enough engineers in the US and was forced to bring in personnel from Hungary, Israel, Malaysia, Brazil and China;
• Patriotic marketing didn't work. Consumers were more interested in price and features than country of manufacture;
• Brand power is crucial. Apple can negotiate lower component prices and has higher margins, while Motorola did not have such advantages.

Analysts have already warned that if Apple moves iPhone production to the US, the smartphones could cost up to $3,500 per unit. Instead, Apple is gradually moving production to India, reducing its dependence on China and avoiding high tariffs.

Apple CEO Tim Cook has repeatedly emphasized that China's advantage is not in cheap labor, but in its large number of skilled engineers. "You could fill a football field in China with toolmakers," he said.

Former Motorola executives say that final assembly in the U.S., rather than full-cycle manufacturing, could be a compromise between political demands and economic reality. “It all depends on what Trump means by Made in America,” said Steve Mills, a former Motorola CIO.

Experts also suggest that Apple could release a limited "American" series of iPhones at a premium price to satisfy politicians and avoid the enormous costs of moving all production.

In the end, Motorola's experiment with the Moto X remains the last major attempt at smartphone manufacturing in the US - a lesson in economic realities, competition, and consumer priorities that Apple will surely take into account.