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Nexus Q: Pricey Because It’s Made In The U.S.A.

by Adriana Lee | June 27, 2012June 27, 2012 7:30 pm PDT

It’s like something out of a vintage ad. Google’s new magic 8-ball look-a-like has a vaguely familiar line emblazoned on it: Etched into the base of the Nexus Q are the words “Designed and Manufactured in the U.S.A.” During mid- and post-wartimes of the last century, there were plenty of products that proudly boasted its domestically manufactured origins (and industries like automotive sometimes still do). But it’s something we almost never see in consumer electronics today.

Heavy hitters, like Apple, Dell, HP and others, have long contracted Chinese factories to make their devices. Inexpensive labor and fewer regulations made production there dirt cheap, leading the big corporations en masse to send product designs overseas so someone else could turn them into reality.

So when word comes out that a “buzzy” new Google product is (almost) entirely manufactured in the United States, people tend to notice.

The New York Times thinks we might be seeing the start of a trend. It’s not just Google — companies like G.E., Caterpillar and ET Water Systems are returning their manufacturing Stateside for numerous reasons:

… Rising labor and energy costs have made manufacturing in China significantly more expensive; transportation costs have risen; companies have become increasingly aware of the risks of the theft of intellectual property when products are made in China; and in a business where time-to-market is a competitive advantage, it is easier for engineers to drive 10 minutes on the freeway to the factory than to fly for 16 hours.

The Boston Consulting Group reported in April that a third of American companies with revenue of $1 billion or more are taking a hard look at bringing manufacturing back to the U.S., with plans either in the works or under consideration. And, the firm believes, this could re-infuse this country with two to three million jobs.

All that sounds great… except that domestic manufacturing often results in higher costs, as in the example of the Nexus Q.

One of the biggest complaints about this social streaming media player, which only just had its debut today, is the $299 price tag. In a market where competing devices from Apple and Roku charge $99 or less, this is a pretty massive chunk of change, and Google knows it. Part of that comes from the unconventional ball shape/twister volume control design, but the company also admits that it’s partly due to the device being produced here in America. The goal is to bring down production costs (and ultimately, retail prices) once the manufacturing volume increases. In other words, the Nexus Q needs to be successful at this $300 price point before it can possibly sell for anything less.

One thing’s for sure: Before we even get to that point, the Q marketing team has a tough sell on its hands, particularly from budget-conscious shoppers. Google says it has no plans to promote the device’s “Made In The USA” lineage — but it may want to rethink that. In this economy, it’s the Q’s strongest potential marketing message.

Would you pay more for an American-made product, whether the Nexus Q or some other? Or do you shop by the prices alone, regardless of origin?

[via The New York Times]

 


Adriana Lee

Adriana is the resident writer-slash-culture vulture who has written about everything from smartphones, tablets, apps, accessories, and small biz...

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