Whats the point of Google marketing the Nexus 4 for $299/$349 ??

Discussion in 'Mobile Devices & Gadgets' started by kaerflog, Nov 27, 2012.

  1. ponyo

    ponyo Lifer

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    Exactly. Computers used to cost $2-3k too. 7" original Galaxy Tab was ~$1k at release. I don't plan paying more than $350 for a new phone going forward.
     
  2. Red Storm

    Red Storm Lifer

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    Likewise. Google is trying to shake up the industry, figures it would take a player that doesn't directly benefit from hardware sales.
     
  3. Eug

    Eug Lifer

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    Race to the bottom?

    Truthfully, I agree with their goals for the most part. I just think that so far their execution has been quite poor.
     
  4. DLeRium

    DLeRium Lifer

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    I realize the consumer doesn't have anything to complain about, but it's like having the US carriers determine what's appropriate cell phone pricing.

    I know computers used to cost 2-3k. So if ISPs started giving free computers out (they've tried), would that be fair pricing? I'm just saying it shakes up the industry totally differently. This is different than your Hyudai or Kia trying to reduce prices in the industry. Samsung, HTC, LG can't really compete with a nonplayer. It's a different kind of game.

    I'm not complaining that I can get a $350 phone, but at the same time to expect that to be the standard is kinda ridiculous.
     
  5. Red Storm

    Red Storm Lifer

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    Expecting the "standard" to remain at $600+ is kinda ridiculous.
     
  6. ponyo

    ponyo Lifer

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    There is nothing ridiculous about Nexus phone pricing. Very aggressive yes but it's no different than what Amazon first did with their Kindle Fire tablets.

    You say it's like having US carriers determine what's appropriate for cell phone pricing? What do you think we have now? US carriers absolutely determine the current cell phone prices. It's nice to see someone like Google trying to change that. Apple isn't going to do it. Apple is in bed with the carriers and part of the problem. But Google can't do it alone. Hopefully they'll get some help from Amazon and Facebook in the future.
     
  7. cliftonite

    cliftonite Diamond Member

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    If Samsung, LG could not compete, then they would not supply google with the phone to sell would they?
     
  8. DLeRium

    DLeRium Lifer

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    US carriers determine the current cell phone prices of subsidized phones. The fundamental issue is the lack of interoperability between the US carriers and the fact that unlocked phones are meaningless in the US except maybe to AT&T. Europe and Asia all have subsidized phones on top of unlocked phones. It's the fact that people there understand you can just buy a phone unlocked as they're all sold unlocked and unbranded.

    In the US with phone exclusivity, and carrier pricing, the lack of an unlocked phone market, yeah you're trained that going through the carrier is your only option. And given that many people here only started venturing into the unlocked phone market recently, I can understand you'll shudder at the $600 pricetag. But what I'm saying is this has been a standard around the globe forever. The $600 pricetag isn't because Verizon says it's $600. That's just the market price.

    I'm all for a lower phone price, but there's tons of industries out there that have excessive pricing. Look at Ultrabooks for example. They're priced at $1000+. The BOM isn't any more than a standard laptop I'm sure. So what is the strategy now? Have Microsoft contact Dell and make a "Microsoft experience" PC and sell it for $499? Dell might not mind as much because like LG they're getting SOME sort of benefit. But how do you expect the industry to follow suit? Even if $499 makes a razor thin profit, it's the fact that you overturned the entire industry. You currently pay more for ultrabooks because it's the new thing. What about traditional laptops? Thicker but cheaper laptops? Like Lenovo's T series is well under $1000 but a high end laptop. Ultrabooks are $1300+. If you drop a Ultrabook to $499 then what becomes of the T-series? Does it die? What about those who want that?

    Similarly if you want every flagship phone to drop to $349, then what happens to the mid range phones? Like the SGS2? External forces changing pricing is dangerous. I'd prefer competition between device makers to drive prices down. And if it's really price fixing, then slap them the same way LCD makers got slapped with fines. This is like saying the solution to high LCD pricing is to have Comcast come in and give you a free TV with cable subscription and expecting prices to revolve around that.

    The real solution is to get America out of the grasp of the gestapo carriers. They need to stop making carrier exclusive phones and allow you to jump network to network. Certainly that will take some technology upgrades, but the iPhone 5 for CDMA networks is currently quite compatible across networks.

    The FCC needs to work with the carriers to figure out a solution too. For example in Europe/Asia the 2100mhz block is shared by the carriers. Why is it the 700mhz block needs to be divided up into A, B, C block? Why can't the 700mhz block be 1 block and then allow compatibility across the networks? I don't see people in Europe and Asia cringing at the $600 pricing. It's just a standard device cost. If there's competition to drive that down, so be it. And once you start decoupling devices from carriers, carriers should be able to lower prices. That's another issue--the fact that carrier pricing reflects the fact that they have to pay back handset makers, and so the costs of the device are borne by the subscription plan. BYOD plans need to exist and should reflect true cost of the service. Kinda like Comcast's plans. You pay extra per month if you need to rent the modem.

    I'm not against lower prices. I just think the right forces need to be in place to drive prices down. The solution for cheap PCs didn't come with Microsoft selling a device for 50% market price and then recouping those costs with OS sales. The pricing of the Nexus isn't ridiculous. It's the expectation that the industry needs to move to market price = BOM + $5, that I find outrageous.
     
    #208 DLeRium, Dec 5, 2012
    Last edited: Dec 5, 2012
  9. Eug

    Eug Lifer

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    Just a note. The iPhone has always been available unlocked in Canada, aside from a few weeks here and there. That began with the 3G though, since the out-of-date-at-release 2G iPhone never was sold in Canada.
     
  10. DLeRium

    DLeRium Lifer

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    I think the carriers are more heavily regulated in Europe/Asia. So the US carriers here can keep those device prices low at $200 despite paying $600 to the handset manufacturer, but then transferring that cost onto the plan and by cutting benefits and trying to make more from texting, etc.

    Remember back in the day it used to cost like $299 or $399 even for a smartphone? Only your feature phones were going $99 or $149. The iPhone really disrupted that by starting $199 pricing. At that point it's almost pointless to get a dumbphone. Even cheap smartphones can be found for free now.

    The problem is that too many people feel that they always deserve a good phone by paying $99 or $199. As a result there's no choice to but drop subsidized pricing down to that range. It's not like you get it at no cost. The plans just get more and more expensive. People don't realize they're paying the same or more overall despite having a lower upfront cost. By feeding the carriers more ammunition for control, people just shunned away at those unlocked devices, believing $599 is just stupid and who would ever pay that price.
     
  11. ponyo

    ponyo Lifer

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    I didn't read your wall of text because you went off in some other irrelevant tangent after the first sentence like you always do.

    It's very easy to see what the prices of phones would be without the carrier subsidies. Take a look at the smartphone vs tablet market. Carriers tried the subsidized model for tablets before abandoning the idea. Tablet market is mostly prepaid now. Win for the consumers. Prices of tablets have come down lot faster than phones. Tablets in general cost more to make than phones yet sells for less. Shows you how harmful subsidies are to consumers.
     
  12. cliftonite

    cliftonite Diamond Member

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    Who is expecting the industry to move market price to BOM + $5? Google isn't an external force, they are also a handset maker.
     
  13. dagamer34

    dagamer34 Platinum Member

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    I don't even think that unlocked phone prices are the problem, but when the cost of buying an unlocked phone is not mitigated by the fact that your plan still costs the same regardless of whether your phone was subsidized or not, for most people, it makes no financial sense to buy an unsubsidized phone.

    The ONLY carrier that offers lower priced plans when you bring your own phone is T-Mobile, which coincidentally the carrier that works best with the Nexus 4.
     
  14. Tom

    Tom Lifer

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    Is there a way to find out when the 8gb will be available ? I mean does Google release info at some point saying we should have some on such and such a date, or we will take orders as of some date ?
     
  15. dagamer34

    dagamer34 Platinum Member

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    The wait time at this point is 7-8 weeks. If you want a Nexus 4 sooner, you're probably going to have to get the 16GB version, and even that is 5-6 weeks. Before, Google had a form where you could put in your e-mail address and they would notify you about 4 hours ahead of them opening up the store, but that's gone now.
     
  16. DLeRium

    DLeRium Lifer

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    Comparing a tablet to a phone is a different story. There's value in the phone being able to make phone calls and being pocketable. You pay for that. The tablet is never going to be the device you take when you're out at the theaters with your friends, out at the mall, playing sports. It's the phone.

    You can argue there are 3G/4G tablets, but what is the point of those? For you to sit at a coffee shop or library and browse. It's not the same as a phone.

    So to say that the cost of cell phones without subsidies is to look at tablets is ridiculous. You need to stop thinking in the US POV where subsidies rule. Globally, phones sell for $600 and that's the market price. Even though some subsidies exist there, the unlocked market is huge and everyone knows you can hop carrier to carrier. You do realize the Nexus 4 sells for a LOT more in Europe and Asia?

    Motorola is operating as a separate entity, and honestly Motorola hasn't been part of the equation yet. I'm pretty sure the current state of Android devices would not have changed if Motorola was still separate.
     
    #216 DLeRium, Dec 5, 2012
    Last edited: Dec 5, 2012
  17. cliftonite

    cliftonite Diamond Member

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    And what is wrong with market price going to $299 now? How much money are HTC, Nokia, Motorola (pulled out of EU and Asia), etc making selling $600 phones?
     
  18. openwheel

    openwheel Golden Member

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    There is nothing wrong with it, which is why his argument is so flawed.

     
  19. ponyo

    ponyo Lifer

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    Phone being pocketable and able to make calls is irrelevant. Size does matter in that it generally costs more to build tablet than a phone. Why is this so difficult for you to understand? Bigger the tablet, the more expensive it is to build. It's more expensive to build a tablet than small media player like an iPod. So if anything, phones should be cheaper than tablets.

    I don't know why you keep comparing phone prices in other parts of the world. Do you think we give a damn? You think you're cool because you imported phones and paid higher price? It's understood by everyone US has the cheapest price for pretty much anything electronics and most other goods. Some of that is due to our buying power and some due to low taxes and tariffs. You can't do direct 1:1 price conversion with international countries. Galaxy Note 2 sells for close to $1,000 in Korea while it sells for $650 in the US. BMW 3 series that sells for $40k here will sell for over $100k in Korea. $20k Hyundai Sonata will sell for $35k in South Korea. What does this say about the market? Nothing other than goods are cheaper in the US. Every market is different and your constant attempt to compare prices in Europe and Asia to the US is stupid.
     
  20. kaerflog

    kaerflog Golden Member

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    Good lord, I only started this thread because I wanted to get a couple of the $299 version and can't get it any time soon.
    Its ridiculous that Google created all this great publicity of a top-end phone for $299/$349 and very few can get their hands on them.(especially the $299)
    Google was able to have plenty of the $199 Nexus 7 at launch but the $299 Nexus 4 is a different story. What give ??
     
  21. openwheel

    openwheel Golden Member

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    if you must have it they are all over eBay brand new. You can pay fair market price today. Otherwise you should've clicked faster. It's just supply and demand.
     
  22. Eug

    Eug Lifer

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    I mentioned this before but strangely enough in Canada when the Nexus 4 went on sale again, the 8 GB model didn't. It was only 16 GB.

    ---

    BTW, T-Mobile is doing strange things with the pricing.

    http://www.androidpolice.com/2012/12/05/t-mobile-removes-nexus-4-from-its-website-entirely/

    T-Mobile had it for $199.

    Then they moved it up to $399.

    [​IMG] Note the MSRP is $499.

    Then they got rid of it completely.

    Then they put it back at $199.

    [​IMG] The MSRP is still $499 though.

    However, it showed up as $499 for some people.

    [​IMG]
     
  23. lothar

    lothar Diamond Member

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    Link?
     
  24. lothar

    lothar Diamond Member

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    Not on the Play Store it does not.
     
  25. dagamer34

    dagamer34 Platinum Member

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    That actually isn't true. A 16GB iPhone is significantly cheaper to build (~$200) compared to the iPad (~$306) or with cellular (~$347), but when you take a look at the unsubsidized prices, the iPhone ($649) is significantly more expensive than an iPad ($499) or with cellular ($629). The iPhone is more expensive only because it doesn't have to deal with market pressures and subsidies hide the true cost of the phone. If the US had more exposure to unsubsidized prices, I really doubt the iPhone would be as popular, and inevitably the price would have to come down.

    I also think it's only a matter of time until Verizon and AT&T no longer subsidize the iPhone by $450 and instead move back to the standard $350 subsidy.