Most popular electronics and consoles are built in China including the iPhone, iPad, iPod, Xbox, Android smartphones, HP desktops, etc. The Google Nexus Q home entertainment system is actually being built in Silicon Valley instead of China. Google did not care about the bottom line in this case, but they were worried about speed.
“We wanted to innovate fast. This is the first end-to-end hardware product that Google has ever put out,” stated Google senior director of Android global partnerships John Lagerling. “We wanted to see if we could do fast (design iterations) rather than having our engineers fly across the world.”
“This is not this big initiative that things had to be made in the USA,” he added.
Google’s decision to build the Nexus Q in the USA are part of a trend to “reshore” manufacturing operations. Manufacturing locally is due to increases in labor costs in China, shorter lead times, more responsive partners, and a better protection of I.P.
The Nexus Q will sell in limited quantities, which made finding the cheapest manufacturer less important. Apple CEO Tim Cook said that he would like to see more company products built in the U.S. instead of China, but he said that there was a shortage of manufacturing jobs in America.
Lagerling did not say what it would cost Google to make each Nexus Q. IHS iSupply analyst Thomas Dinges estimates that a high-volume Asian manufacturing company may have charged Google about $8 to build each device, but a smaller contract manufacturer in the U.S. would charge about $16. The Nexus Q sells for $299.
Lagerling did not say which contract manufacturer would be building the Nexus Q because of security and confidentiality reasons. However the New York Times reported that the manufacturer is located near Google’s Mountain View, California headquarters.