yashsingh1/xdaforums huggingface dataset:
[Nexus 4 General] rdbwpb:
Carrier Factor in USA

I believe the subsidized carrier market in the US is one of the big factors holding phone prices high. All carriers price their off contract phones so high that people are forced to buy on contract. Then they add ETF fees of 300+ dollars to lock people into the contract. A carrier paying $300 for a smart phone ties you to a contract and makes their money there. They even hike the monthly rate to "cover the subsidy" but in fact there is very little if any subsidy. If you break the contract they charge you an EFT and make their money anyway.

If there were not contract tied phones I believe there would be a much more active market and prices would be lower. I think Google is making a point with Nexus that most prices are to high by selling a top of the line product at a reasonable price. I've seen tear down estimates on iphone that put the cost to manufacture at around $200. Apple sells them for $500+. A more reasonable margin would be $400 and in a competitive market I believe you would see that price.

My point is that we've been conditioned to believe these phones are worth much more than they are and if the FCC would force a competitive market by eliminating subsidies $350 super phones would become the rule instead of the exception.
[Nexus 4 General] draugaz:
I think this is easy one to answer: a market segmentation.

Let's pretend we are LG management and look at the markets:

1. USA

N4 price - 350$, limited availability (only online), lacking vital features like LTE.

LG Optimus G - 200$ (strings attached, but yanks don't seem to mind), wide availability in retail, LTE, more megapixel, more flash etc.

In other words - no brainer, we will do allright, N4 is not a competitor.

2. Some parts of Europe (Germany, France, UK, Spain)

Many people there buy their devices in the free marker at full price. LG while widely available in retail is an underdog here, competes mostly on price. Their flagships rapidly drop to the nexus4 price levels and even below. And aren't selling well even at that bargain price.

Basically there is not much to lose. LG is widely present in retail while distribution channels assure cheap N4's won't flood the free retail market (just in case).

3. Australia - no idea, but I think there is a similar scenario.

The rest of the world? No Nexus4 - no problem :)
[Nexus 4 General] hbkmog:
Yep, the carrier subsidized model needs to go. But in the US, there's simply not enough competition between the carriers like in the rest of world so they can just do whatever **** they want to.
[Nexus 4 General] pack21:
Yeap, but also, no LG (Google) markting = no LG smartphones buyers in future. If i can't buy a N4 i would buy a SGIII or XONE.;)

To gain some profit in future, LG must spend some money first in markting.
[Nexus 4 General] draugaz:
Yes and no.

In a competitive market you would pay more for phones and less for services. Just look at the free/usubsidized phone markets in europe.

The usual scenario - top brand superphones come out for something like 500-600eur after taxes (like 700$) and then slide to something like 300eur and below. Less cool phones (like Sony Xperia P for example) come out at under 400eur and then sell for 200-250eur.

On the other hand, your average monthly services bill will be reduced to something like 10-20-30$ depending on usage.
[Nexus 4 General] mke1973:
The Nexus 4 launch is now behind us. Talk in the cellular industry is already looking ahead to the next Nexus. The big question is whether Google will change it's pattern for the next Nexus (especially in the light of the poor launch of the Nexus 4). The rumor last cycle that is starting up again is that Google won't pick one manufacturer for the Nexus 5 but several. This would probably mean that the Nexus 4 would be the last subsidized Nexus that Google would offer directly. This is an interesting concept. If Google could set uniform software and hardware standards they could at least gain ground on the one big advantage that Apple has over it. The other funny thing is that Apple seems to be deviating from its traditional once a year phone upgrade if the rumors about the release date on the iPhone 5s are true (next spring).
[Nexus 4 General] theguitarman94:
I think this is a fantastic opportunity for LG to make a name for themselves. For the smartphone market and more importantly android market. In the UK people have forgotten that LG even make phones. I know I did until very recently. Their pre smartphone era phones were fairly popular such as the lg cookie and the lg chocolate but their poor build quality and performance gave them a terrible name and they just didn't make it on to the smartphone market kind of like nokia in a much smaller way. I really hope they aren't doing anything stupid because without making the next nexus I would of NEVER considered buying an LG phone. I hope the Nexus 4 turns out to be a fantastic phone! I'm planning on buying it buy the end of the month. If 1. If I get the money for it and 2. If the darn thing gets a stable amount of stock where you don't have to destroy your f5 key trying to get one, :)
[Nexus 4 General] shadehh:
I remember using an Optimus 2x back then. Dare I say it didn't look or feel that bad for its time. Their upgrade policy dragged them even deeper into the dirt though.
[Nexus 4 General] Nospin:
LG is making loads of money on the Nexus 4. They want it to succeed.
[Nexus 4 General] dontex:
100% agree...this is spot on...all these manufactures are doing are inflating the off contract price because there in collusion with the carriers in the U.S. to make you buy a on contract phone... Google basically pulled the rug under them with the N4...it just goes to show you the LG Optimus G could be sold at the same price but its all about greed...between carriers and manufactures...
[Nexus 4 General] shadehh:
LG IMO could play it out smartly.

1. They should use the nexus 4's popularity with the LG label to gain users.

2. Seeing how well this is selling, unlike the other models, after having sold millions, and the nexus 4 no longer being google's flagship phone should announce an "OPTIMUS 5" which will be using stock Android UI.

3. Every year from that day on they should bring out a one FLAGSHIP phone with great specs (what they are known for). And continue developing on their phone using stock android making it easier to upgrade the OS

4. $$$$$$$

5. PROFIT!
[Nexus 4 General] agtitan:
Do you really think Google and LG just priced this on a whim? No, this was a very well thought out partnership between Google and LG. This is LG's phone with their name on it. No company would ever be upset because their product is successful.
[Nexus 4 General] jasonwc:
The Nexus 4 launch worked out great for me, and I'm sure others are in the same situation. I purchased an HTC Incredible right after Black Friday in Nov 2010 and got the phone for free. I was one of five people on a contract, so my cost was low (~$40/mo.). However, I now have to go for an individual or one of the new family plans because the owner of the plan is canceling, and the new prices are terrible. At minimum, it would cost $75/mo. with taxes/fees for a plan with 2 GB of 4G data. The unlimited calling and texting is worthless to me as I make few calls (prefer using a landline for superior quality) and use Google Chat rather than texting. I really only care about the data. So, I wasn't sure what to do when my contract ended at the end of November.

With the Nexus 4, I now have an amazingly affordable option - T-Mobile's $30 plan offers 100 minutes, unlimited texting and 5 GB of HSPA+ data and it actually costs $30 ($28.50 if you buy online) with no taxes or fees. In addition, I will have a phone with great developer support, and the latest updates from Google. I don't think I'll be the only one dropping a contract to go prepaid. The prices are often less than half of what postpaid costs. At $350 it's a no-brainer. Luckily, I'll be able to allow my Verizon contract to expire naturally without an ETF since the timing worked out.
[Nexus 4 General] SIGUEL:
LG is still getting payed by Google for every Nexus sold, so why would they sabotage their own $$$$ by tampering with the Nexus⁴ production???

Google wasn't prepare for this kind of reaction, and trust me they will have a bunch of them available for this holiday.

SKYNET
[Nexus 4 General] jvmaniac:
What's interesting is that the Nexus 10 is sold out as well, and demand for that device was nowhere near as high as for the N4. And I'm pretty sure Samsung is more than capable of mass production. So I think it was just a gross underestimation of demand on Google's part. As disappointing as the whole ordering process has been, I really don't think LG is to blame
[Nexus 4 General] SIGUEL:
That's the most possible scenario, Google underestimated the power of the Nexus brand, combined that with the amazing price if was bound to go this way.

You'll have you're Nexus⁴ before Christmas.

SKYNET
[Nexus 4 General] ptesmoke:
thisssss

I would never ever ever buy an lg device... ever.... except if it's a nexus and Google overseen it. LG needs to suck up the fact they may lose money on this device... and open their eyes to the fact that this could rocket them into the top 3 manufacturers if they gain so many loyal customers... then... next device make money... and make more of it since your nexus device attracted hundreds of thousands of converted LG fans...

but... I'm not paid to think out of the proverbial box. it's just an opinion.
[Nexus 4 General] SIGUEL:
For the million time, LG IS NOT LOOSING MONEY ON THIS PHONE.

They are selling the phone to Google @ the same price they sell the Optimus G to carriers. Google doesnt mark up the phone with an insane price.

LG is making full $$ on this phone

Google is probably making less than $25 for every phone, but they get back $$$ from the play store and all the data from search and ads.

SKYNET
[Nexus 4 General] Topgun966:
Actually not really. Google is subsiding each phone so LG is making a profit.
[Nexus 4 General] shadehh:
how do you explain this then?
[Nexus 4 General] irishrally:
LG is looking to blow up like Samsung did with android phones. They are on the right path.
[Nexus 4 General] SIGUEL:
Simply, BECAUSE THEY CAN.

The IP5 (16GB) cost $202 to make. And they sell them @$600 unlocked, there's this magical thing call markups and making all the profits that you can.

If people are willing to pay $500 for it, why LG would sell it for less?

SKYNET
[Nexus 4 General] [hfm]:
I was always rooting for Nokia to dump Symbian and all their side projects and go all-in on Android. Could you imagine a Nokia Nexus? Then Elop came along and that was that. I hope Nokia can make some good things happen with Windows Phone 8 just to keep the competition alive and well. 3 big platforms is a win for everyone.

I've liked my two Sammy Nexus phones. People always hate on plastic, but it's rigid and durable. My G2 was a creaky metal mess. The N1 was nice, but a little heavy. Metal != quality. I'm just hoping the glass N4 will stand up over at least a year when I will be spamming Shift+[Ctrl or Command]+R all over again for the next Nexus. :)
[Nexus 4 General] Big_Drew:
This is kind what I was wondering. I know the price for unlocked devices is significantly marked up from the prices carriers pay, but I wasn't sure how that compared to Nexus hardware.
[Nexus 4 General] shadehh:
Actually what you are saying now is contradicting. So you are saying that lg sells its phone to Google, so basically they couldn't care less at what price they decide to sell it at. All fine and good

But in the the Spanish phone company's case, lg seems to be demanding they sell it at 600 euros. how does that make sense? What I am saying is that yes, lg is to blame for high prices. Already outside the play store which is not fair at all.
[Nexus 4 General] Zurginator:
iP5 cost $202 in PARTS to make. Add manufacturing, shipping, logistics, and It's close to $305. Add R&D, Designers, Engineers, prototypes, testing, etc and you're probably looking at $450 or so. Add the costs of a retail store (AT&T or whatever) and it's going to be around $500. Sure, they're running a profit, but it's not as easy as adding up the parts and saying "Profit!"
[Nexus 4 General] shadehh:
That is bull... The galaxy s3 online sells for 450$ now. That must mean that they(whoever is selling) are still making profit. Not sure by how much but obviously enough and the n4 specs aren't that superior to the sgs3 after all. So manufacturing price should be similar. Now the nexus 4 with only 16gb storage, no lte, no SD,OK cam... let's be honest, the thing that makes this phone outstanding is the fact that it is a Google phone and nothing else. I would very much welcome a price tag of 400 euros. Let's not forget that euros > $ .. and they really wanna tell me that to make profits the price costs between 550 and 600 euros in non play store countries???

Note that 550 euros are 700 $ and 600 would be 763 $.

As if we're not being ripped off enough with crappy euro conversion already they wanna further increase the price.....

So basically 430 euros would probably be the price of an unlocked nexus in the u.s if it weren't for the play store (round 500-550$) .and I'm paying 415 for my pre-ordered one...from Germany. Hope it goes well and guarantee is covered in my country. See no reason to pay 150-200 euros more
[Nexus 4 General] Zurginator:
Don't forget you have a massive import tax though. I'm not saying it's fair, I'm just saying it's not as simple as people are making it out to be.

It's entirely possible that LG is charging Google $400+ for the N4, and Google is choosing markets to subsidize it in. I wouldn't doubt that's the case with the Nexus 7 for a minute. Asus originally planned on selling it for $250. A $50 Google subsidy isn't all that unlikely.
[Nexus 4 General] Zorachus:
Great post Alex Jones :)
[Nexus 4 General] Richieboy67:
These phones are basically made with slave labor. Trust me... Google and LG are making tons off this.

Once again, it costs them little to make these. The mark up is incredible. Do you think it costs them $300 per phone? Less than half that... Maybe way less...
[Nexus 4 General] Tomatoes8:
I don't buy that LG is not happy for a few reasons.

One, the Optimus G is not going to sell with or without the Nexus 4, so LG would gladly take any profit and good press that they can from the design.

Two, manufacturers have the mindset where they can give you a good price as long as you buy in bulk. Apple got cheap retina displays, LG has a steady profit, it doesn't matter if the profits are low for each screen because it adds up. The same thing applies here, Google gets cheap phones, Qualcomm gets money for their SOC, and LG gets a steady profit/free press for their design, screen, and battery. Probably not much for each but it will add up since the Nexus 4 lifespan and sales is going to be far greater than the Optimus G.
[Nexus 4 General] wsnnwa:
onsairn eftablifhed

I work in the cell retail industry, all I can say is that even retailers makes $200 profit selling any android flagship phone, while they make close to 0 with the iphone as all the profits go to Apple. The manufactures also make a big profit, and the service provider makes most of their money off their service(s) or if they sold the device too then they make some from it too ( As stated earlier).

This is as much as I can post unfortunately, believe me or not. I live the answer.

The only money anyone can make from selling the iphone is through accessories for it or if they are the service provider then through services

Edit : my Title got crazy....>.>
[Nexus 4 General] Zurginator:
Made with slave labor? Absolutely. Designed, Engineered and tested by slave labor? Absolutely not. THAT is where the cost comes in. I don't think you guys realize how many millions go in to development --- even if its based on an existing product.
[Nexus 4 General] VictorNYC:
I completely agree ! Just look at T-Mobile USA ! It's selling the exact same phone priced at 350 on the Play Store for 500 at their stores an on their website ! I'm sorry but there should be laws against it in place to protect most costumers who more than likely didn't even know they had the option to buy it on line yesterday a lot cheaper ( and let's face it, they will be a lot since not everyone it's an XDA member or a android geek ) Know on the other hand I could see Samsung not being too crazy about the idea of selling a phone with top of the line specs THAT cheap when all their flagship phones are between 500 and 650 dollars right now, I mean how could they justify their prices after that ? LG needed Google for publicity as much as Google wanted to make a statement : STOP OVERCHARGING ppl for technology like Apple does and let them OWN their devices the way the should to do as they please with them ! Enough of this carrier bloatware and carrier IQ crap ... GOOGLE THANKS ! Finally someone with power made a stand for the average costumer trying to buy a phone or tablet .... No way prices stay the same after all this, No way. Unless you are an iSheep fan

Artificial Intelligence is no match for natural stupidity....
[Nexus 4 General] Zurginator:
Look at it this way:

LG sells the N4 for $400

Google subsidizes it $50, because they make it up in the Play Store

Tmobile adds $50 to cover shipping, store maintenance, and employee expenses, and tacks on their profit $50.

Now is it so bad? Bear in mind I'm only speculating, but it's all entirely possible.
[Nexus 4 General] expertzero1:
Its at the price for 500 because they have to pay their employees... Makes sense right?
[Nexus 4 General] Alexander DeLarge:
Oh my god, I thought you were serious until I saw the last line. David Icke's facebook page has had quite the effect on me.
[Nexus 4 General] Seemonsters:
Well done, well done sir.

:cool:
[Nexus 4 General] VictorNYC:
Noooo they would buy it for slightly less than 350 ( I mean not even google works for free ) plus T-Mobile sells phone plans ! They don't manufacture cellphones .. Proof of it it's every cellphone provider across Europe and Asia

Artificial Intelligence is no match for natural stupidity....

---------- Post added at 12:12 AM ---------- Previous post was at 12:08 AM ----------

Again Noooo they would buy it for slightly less than 350 ( I mean not even google works for free ) plus T-Mobile sells phone plans ! They don't manufacture cellphones .. Proof of it it's every cellphone provider across Europe and Asia AND they are not even that bad just look at Verizon ! Their prices are sky high ! Even on non LTE phones and tablets, trust me I know I have an iPad 3 with LTE and a iPhone 5 that I bought for my girl witch I pay for ... THAT'S WHAT PAYS THEIR EMPLOYEES ( I dated a girl for a few months that worked for Verizon like 2 years and they ALL work for commissions ( even the phone service sales reps ) when ever you purchase anything they take a little more home witch I'm fine with as long as you have the choice .. Go to the store pay more buy it from hem on line get a little discount, but they are the same price all across

Artificial Intelligence is no match for natural stupidity....
[Nexus 4 General] MatAuc12:
Who gives a damn if LG is not happy... Google can buy them, sell them, burn them, rebuy, roll, smoke, buy. Just look at how much bigger Google is.

But anyways, that's not the point here anyways. LG isn't affected any more than EVERY other smartphone manufacturer because it forces prices down. I don't know (and no one her knows so don't bother) the relationship in detail Google has with other manufacturers right now, but I hope its very very good because they might get boycotted for driving the prices down in their market.
[Nexus 4 General] draugaz:
Which would mean, that someone fairly high at LG would need to face the consequences, no?

I think it is safe to assume that certain "someone" will do anthyng to cover his ass.
[Nexus 4 General] ackliph:
The FCC does not need to step in to anything. Laws don't need to be implemented to force prices lower.

The majority Americans have been paying inflated prices for years because of lack of competition in the phone market. Now that Google is introducing a top notch phone at a low price, we can now have some more competition in the phone market. Competition drives the prices down! Not government regulations!
[Nexus 4 General] draugaz:
Let us not forget, that LG (and every other manufacturer) is much more than just some engineering and manufacturing.

There is also a marketing and distribution all the way up to the sales counter.

While it is probably true, that LG is not losing money on each device they manufacture (~300$ sounds like a normal wholesale price), it completely cuts out the whole distribution, logistics and retail channel. Which LG is completely dependent on. If distribution revolts - LG dies, just look at what happened to Nokia.

That's why N4 costs so much outside of the PlayStore. Because if distribution gets the device for the similar price, each link in the distribution chain adds their usual markup (they don't work for nothing) and at the end you land at usual 500$/euros/whatever.

LG can't afford to lose their distribution.
[Nexus 4 General] magnumrt562:
You listened to Joe Rogan's podcast too?
[Nexus 4 General] ackliph:
I think you might be on to something here. Why doesn't Google just make a Motorola Nexus that they can sell direct to the consumer?
[Nexus 4 General] Kenneth131:
thats one question that remains to be seen, I dont get it either. Looks like the big G just wanted the backlog of patents motorola had in its portfolio. We may still see a moto nexus yet mind you
[Nexus 4 General] Alexander DeLarge:
I would just like to mention that I have been posting about the Nexus 4 on my personal Facebook and people are always confused about what's so great about unlocked devices and "why not get a Samsung Galaxy S3 for $200" and once I explain that it is my device and I can save about $30 every month on a "bring your own device plan" they always say "I should do that!"

The Optimus G will sell great BECAUSE of this phone. They'll hear from their tech-savvy friends that the Nexus 4 is great and they'll get a LG phone instead of HTC/Samsung.
[Nexus 4 General] Zurginator:
Because Google doesn't want to scare the **** out of the other OEMs. They might get worried Google is going to pull an Apple.
[Nexus 4 General] Luxferro:
LG is a lot more than just a cell phone manufacturer. They can't be compared to Nokia, who's only business is 1 area.

The same goes for Samsung. But they have even a more broader market of products. They both make TV's, both make LCD panels, and other electronics. While Samsung makes a lot of components (SoC, RAM, Flash, ect, ect).
[Nexus 4 General] Zurginator:
Don't forget Samsung Heavy Industries.
[Nexus 4 General] mick1mouse:
nop
[Nexus 4 General] MatAuc12:
They will eventually. But Google wants to be PRESENT, not monopolistic. Buying a cellphone company, being the software provider and offering a half price on it could possibly face some anti-thrust somewhere along the way.
[Nexus 4 General] mke1973:
Actually, Google is subsidizing the units sold through Playstore and they're setting the price for those units (cellular industry magazines believe that Google is losing upto $200 per unit they sell). LG sets the price directly for the other merchants selling the Nexus 4 (most at an unsubsidized price; however, some EU carriers do offer a subsidized phone based on signing a contract). It's interesting that LG had no problems delivering adequate stock to unsubsidized merchants; none of them ran low on stock. I'll say it again, it's in both Google's and LG's best interests to push this phone through other vendors because LG makes more money and Google doesn't lose money because it's not subsidizing those units. By the way, the US carriers aren't seeing growth in their postpaid plans, prepay is the largest growth sector in US cellular service now. As long as the economy is so bad, postpaid will probably continue to decline in the US. In the EU, as smartphones become even more expensive, expect to see postpaid grow as carriers begin to mimic the US model and subsidize phones.