[Nexus 5 General] QWIKSTRIKE:
Where's razor thin margins. Yes, I run a business for 25 years as well. Whats the gross profit on a $225.00 production device selling for $350.00....64.28%, and by any business standard that is large. What advertising did they spend most of it was leaked speculation, and a website that they probably designed and implemented. Google does not make hardware. They only make the software, and as you may or may not know a full blown os Windows 8.1 was sold for $39.00 for 4 months to early adopters. Now its going for $119.00.

They don't R&D hardware they just use said hardware to delvier "software". The software is all encompassing, and on any given device will net them billions of dollars a quarter. They R&D software and that is monetized by adds delivered to the enduser on said devices! This software the last time I checked cost OEMs 5.00 to buy and place on a device. Camera lens makers ie Sony, cpu and radio antenna integrators iE Qualcom TSM, and now Intel RD product that go into devices and the best cost effective item that works or the best equipment that is cutting edge in the industry is used and assembled by companies like Foxconn in China costing Companies like iPhone $225-$250.00 for poduction.

These 225.00-$250.00 are then marked up to suggested retail markups to what customers will bea which has creeped up to 700.00 because of demand, and technological break throughs. I have been also build and selling PC's as a hobby since 1995. I wish I could build a state of the art PC and mass sell it for 65% gross profit.

So when you look at the R&D that google pust into a phone it really is limited to software then the OEM makers like Samsung, HTC do the rest. How ever they buy from OEM partners like Qualcom TSM, Sony, Samsung, Texas Instruments, Invidia, Intel, Motorola, and many other Tech titans that do R&D on things that they either use themselves or sell like Samsung, or Motoroal, and Sony Does!

Wake UP, a $225.00 iPhone selling full retail $700-$750.00 is because Companies like AT&T, Verizon, Sprint, Tmobile, Vodaphone and many other carriers have to pay brick and mortar cost of electricity, sales reps, customer service reps, and Techs. They in turn get you to buy a 700.00 phone for say $199.00-$350.00 on contract, and make you pay $90.00 a motnh for services in many case that are of no value except to exploit the next best industry leading product of demand. Google just cut out those middle men.....that's it in a nut shell.

Don;t for a minute think that in the world of business they are subsidizing you, because they "are not"! So for every 2 year contract that ypu pay $200.00-$250.00 they make a minimum of $2000.00 when its said and done. But, wait they sell you a insurance contract that takes advantage of your financial situation. You break a outer glass and give up a new phone for a refurbished phone, and I got burned so many times by that in the past. But, it was my choice so it is what it is. However youy pay$10.0-$12.00 monthly plust send them $150.00 for a used device. Even if you don't use the insurance you will have given the lower end carriers almost $2488.00+$200-$350 up front cost, and this does not include hidden FU cost.

There is profit every where you turn in this industry and there really isn't as much subsidizing as you think. Sprint now has 80.00 a month with 12.00 insurance is 92.00 monthly x12 months plsu say the cost of a Note 3 is 249.00-349 of 700.00! You pay as low a s 249.00 up front and then givve them 80.00x12=$960x2 years=$1920.00+$288.00 insurance+ upfront cost $200-$350.

Is better to have 10- 20 $100,000.00 yearly dollar sales, or 60 million $2000.00 yearly sales?

When I 1st started using a cell phone for business in 1989/1990 up front they cost 300.00 and was installed in the car. Prices were crazy as compared to today $180.00-300.00 montly bils were common for 1/10 the minutes lol, but it was a tax write off for me.lol The industry realized with high user cost like my average bill that it was better to reverse to the above statemnet of lowering cost to lure in milloins of people vs hundreds of thousands of people. Verizon can tell you that the lower cost for millions vs higher cost for hundreds of thoudns is profitable, and they R&D profits to LTE and coverage expansion that monetizes extremely well! Nothing wrong with turning a profit now is there! No, not in my book, but people miss the big picture in my opinion on subsidies....they ar nothing more than a mouse trap!