Why Google Built the Nexus Q in the USA

Cost wasn't the number one priority.

by Jane McEntegart July 5, 2012 at 11:00 AM - Source: Reuters

Since its unveiling last week at Google I/O, Google's Nexus Q media streaming device has attracted quite a bit of attention thanks to the fact that the device is made in America. At a time when the vast majority of our electronics are manufactured in Asia, the Nexus Q's 'Made in the U.S.A.' branding is a very rare thing indeed. So what made Google decide to build its latest device in its own backyard?

For Google, it was all about speed. Speaking to Reuters, the company said they wanted to see how fast the product could go from concept to finished product, and a Chinese manufacturer would have lengthened the process. John Lagerling, Google's senior director of Android global partnerships, told Reuters that cost wasn't the number one priority.

"We wanted to innovate fast. This is the first end-to-end hardware product that Google has ever put out," he said, adding that Google wanted to see if it could do fast design iterations rather than flying engineers across the world. "This is not this big initiative that things had to be made in the USA," he said.

Google's Nexus Q will launch next month priced at $300. However, Google hasn't yet discussed the manufacturing bill of materials (MBOM), so we don't yet know how much of an impact its American assembly has had on the overall price.

_{Follow @JaneMcEntegart on Twitter.}

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beardguy 5 years ago

This is great news, keep the manufacturing in the USA. Proof that you can keep everything in the States and still have a competitive price. I already have a Kindle Fire, but I would gladly pay an extra $100 for something produced in my own country. Too bad Google's reason for doing so is merely to speed up production.
Osmin 5 years ago

The truth is that everything can be made in America with better quality too. It’s mostly greed when you make a cheap Nike shoe overseas and try to sell it for over $100 in America. Not too long ago, 9 out of 10 things were made in America and those employees paid American taxes and kept our unemployment low. Now every time we buy something made overseas, it helps to remove jobs in America and increase the deficit at the same time. This is the global economy concept, that all of us are competing with foreign workers at near slave wages/conditions.
boiler1990 5 years ago

If Google is going to make these mainstream device (read: mass produce and sell at lower prices), they are going to have to sell the contract overseas. In the USA we simply don't have the manufacturing base to make the consumer costs of these devices reasonable (hence why the device is $300).

Labor costs are actually very insignificant when compared to the total cost of manufacturing operations, overhead (owning the property/machinery, utilities, etc), shipping/logistics, inventory, and other major costs. Labor has almost no effect on the end cost to consumers, which renders corporations' arguments about labor costs moot. Intel's fabs cost multi-billions of dollars, yet I doubt their total employee salary at any individual fab exceeds a few million, which is an order of magnitude difference.

That's why Steve Jobs told Obama that Apple's manufacturing jobs wouldn't return to the US (at least in the near future) - there's no infrastructure to support Apple's (and other tech companies') production operations. It will also take a while for America's manufacturing to catch up to Asia's (if we get it started) - Foxconn and other OEMs have had 100s of plant-years (maybe even 1000s) in which they could work out the kinks, improve their technology and processing, and build up the amenities to support such a large-scale operation.

I look forward to the day that manufacturing operations return to the USA, especially in this field, but people need to start targeting the root cause of these corporations' resistance rather than an easy scapegoat they try to deceive us with.

Other Comments

captaincharisma 5 years ago

because they knew it was going to fail
beardguy 5 years ago

This is great news, keep the manufacturing in the USA. Proof that you can keep everything in the States and still have a competitive price. I already have a Kindle Fire, but I would gladly pay an extra $100 for something produced in my own country. Too bad Google's reason for doing so is merely to speed up production.
scannall 5 years ago

At $300 it isn't going to sell very well. It offers less than the competitors for 3x the price. Seems more of a publicity stunt than anything.
Osmin 5 years ago

The truth is that everything can be made in America with better quality too. It’s mostly greed when you make a cheap Nike shoe overseas and try to sell it for over $100 in America. Not too long ago, 9 out of 10 things were made in America and those employees paid American taxes and kept our unemployment low. Now every time we buy something made overseas, it helps to remove jobs in America and increase the deficit at the same time. This is the global economy concept, that all of us are competing with foreign workers at near slave wages/conditions.
boiler1990 5 years ago

If Google is going to make these mainstream device (read: mass produce and sell at lower prices), they are going to have to sell the contract overseas. In the USA we simply don't have the manufacturing base to make the consumer costs of these devices reasonable (hence why the device is $300).

Labor costs are actually very insignificant when compared to the total cost of manufacturing operations, overhead (owning the property/machinery, utilities, etc), shipping/logistics, inventory, and other major costs. Labor has almost no effect on the end cost to consumers, which renders corporations' arguments about labor costs moot. Intel's fabs cost multi-billions of dollars, yet I doubt their total employee salary at any individual fab exceeds a few million, which is an order of magnitude difference.

That's why Steve Jobs told Obama that Apple's manufacturing jobs wouldn't return to the US (at least in the near future) - there's no infrastructure to support Apple's (and other tech companies') production operations. It will also take a while for America's manufacturing to catch up to Asia's (if we get it started) - Foxconn and other OEMs have had 100s of plant-years (maybe even 1000s) in which they could work out the kinks, improve their technology and processing, and build up the amenities to support such a large-scale operation.

I look forward to the day that manufacturing operations return to the USA, especially in this field, but people need to start targeting the root cause of these corporations' resistance rather than an easy scapegoat they try to deceive us with.
chomlee 5 years ago

As much as I wish we could make everything here in the US, we have to make a choice. If you want to have as much "stuff" that you already have, then we are better off having things made in China. If you are happy with just a few well built products then having things made here would be better. keep in mind that during the days that things where made here, Americans could only afford to have so many things. In the last 30 years since things have been made in China/Asia, our purchasing power has increased by a factor of 10.

It could be possible to maintain that kind of purchasing power if you where able to automate the manufacturing processes more and didn't have to worry about Unions bringing the costs up. It would be great but it is probably a pipe dream.

Being an engineer and seeing work exported to other countries, I have seen first hand how even though it is more expensive to do things here, in the long run it can still be much more efficient.
chomlee 5 years ago

Oh my, I just read what the Q actually does (moreso what it doesn't do) and someone at google needs to be shown the door. Hopefully there will be something more to this than what is currently being shown especially for $300.
eddieroolz 5 years ago

I'm surprised the Chinese manufacturers would have slowed down the development process. Considering their work environment you could probably get your product readied in months by working in tandem with Google in Mountain View.
kawininjazx 5 years ago

beardguyThis is great news, keep the manufacturing in the USA. Proof that you can keep everything in the States and still have a competitive price. I already have a Kindle Fire, but I would gladly pay an extra $100 for something produced in my own country. Too bad Google's reason for doing so is merely to speed up production.

I hate to break it to you, but the kindle fire would be much more that $100 extra if made in the USA. And it's not our fault, its all the regulations, excessive taxes, and unions that drive the prices up. The US could certainly make the best products, but we are our own worst enemy when it comes to building our economy.
slabbo 5 years ago

I think it's just part of Google's experiment. Work with outside company (Asus) and develop something great and well priced like the Nexus 7. Then work with one inside the USA and you come up with a piece of expensive crap, the Nexus Q.
belardo 5 years ago

It costs $300 and does almost nothing. An AppleTV or most other media players have more features and abilities for $50~200.

As some articles state... WTF?!
slabbo 5 years ago

But not to worry, Google is gonna bring the Nexus Q plans overseas for production and you'll see it in stores in 2 months for only $50. i'm joking btw...but wouldn't be surprised if that really happened.
scrumworks 5 years ago

Why Google Built the Nexus Q in the USA? Because nobody else than american buys that crap.
sviola 5 years ago

boiler1990If Google is going to make these mainstream device (read: mass produce and sell at lower prices), they are going to have to sell the contract overseas. In the USA we simply don't have the manufacturing base to make the consumer costs of these devices reasonable (hence why the device is $300). Labor costs are actually very insignificant when compared to the total cost of manufacturing operations, overhead (owning the property/machinery, utilities, etc), shipping/logistics, inventory, and other major costs. Labor has almost no effect on the end cost to consumers, which renders corporations' arguments about labor costs moot. Intel's fabs cost multi-billions of dollars, yet I doubt their total employee salary at any individual fab exceeds a few million, which is an order of magnitude difference.That's why Steve Jobs told Obama that Apple's manufacturing jobs wouldn't return to the US (at least in the near future) - there's no infrastructure to support Apple's (and other tech companies') production operations. It will also take a while for America's manufacturing to catch up to Asia's (if we get it started) - Foxconn and other OEMs have had 100s of plant-years (maybe even 1000s) in which they could work out the kinks, improve their technology and processing, and build up the amenities to support such a large-scale operation. I look forward to the day that manufacturing operations return to the USA, especially in this field, but people need to start targeting the root cause of these corporations' resistance rather than an easy scapegoat they try to deceive us with.

Yet, all Intel processors are manufactured in the US. And IBM processors. And Texas Instruments. And now, Samsung's Apple's A5 processor. And Harley Davidson's bikes (they do have 1 factory outside the US, in Brazil, but that only produces bikes to serve the Brazilian market). The reason companies manufacture their goods outside the US is because it is cheaper. They get cuts on taxes and the US law allow them to pay taxes offshore (thus, why Google and Apple pay taxes in Ireland, where tech companies are tax free).
Osmin 5 years ago

The Nexus Q is basically an Android computer without the software to make it versatile and unique. It could have been a new android video game console with audio/video entertainment capabilities from the start in order to justify the price to the mass market. I also didn’t expect from the comments above that people prefer to be unemployed, under-employed, under paid, and without economic stability in order to find cheaper products made in foreign countries. They already have Chinese workers being paid 75 cents an hour building the new San Francisco Bay Bridge in California.
kcotton 5 years ago

kawininjazxI hate to break it to you, but the kindle fire would be much more that $100 extra if made in the USA. And it's not our fault, its all the regulations, excessive taxes, and unions that drive the prices up. The US could certainly make the best products, but we are our own worst enemy when it comes to building our economy.

Regulations like not dumping toxic waste out the back door?
I'm not going to touch the taxes comment.
And work force represents a fraction of production cost.
Kami3k 5 years ago

kawininjazxI hate to break it to you, but the kindle fire would be much more that $100 extra if made in the USA. And it's not our fault, its all the regulations, excessive taxes, and unions that drive the prices up. The US could certainly make the best products, but we are our own worst enemy when it comes to building our economy.

Fox News much?
Kami3k 5 years ago

sviolaYet, all Intel processors are manufactured in the US.

Costa Rica is not the USA.
sviola 5 years ago

Kami3kCosta Rica is not the USA.

That, along with one in Ireland, 3 in Malasya, 2 in China and 1 in Vietnam are not manufacturing plants. They are only assembly plants, the chips are all manufactured in the US, according to Intel public documentation. You can read more here: http://download.intel.com/newsroom/kits/22nm/pdfs/Global-Intel-Manufacturing_FactSheet.pdf
sviola 5 years ago

sviolaThat, along with one in Ireland, 3 in Malasya, 2 in China and 1 in Vietnam are not manufacturing plants. They are only assembly plants, the chips are all manufactured in the US, according to Intel public documentation. You can read more here: http://download.intel.com/newsroom [...] tSheet.pdf

Actually, the Irish one is also a manufacturing plant, like the US ones. The ones in Asia and Costa Rica, though, are asembly facilities.

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