The Nexus 5's Price

[ottscay]

I'd like to discuss the price of the Nexus 5 and its consequences. Here are some topics off the top of my head:

Here's my take:

1. How have other companies reacted to the Nexus 5's price?

They can't, actually. Carriers want prices high in order to make on-contract pricing attractive, and they generally set both on-contract and off-contract pricing when they agree to carry a phone. To buck that would be to lose marketing dollars and potentially shelf-space for an OEM. The closest thing to a reaction is what Motorola is doing with the Moto X off-contract price cut (and the online customization, which makes the whole idea much more interesting), but of course that's really Google too.

2. If Google offered a more expensive model, what would change?

Do you mean exclusive to the current price point, or in addition to it? Raising the price (even with better features or build quality) at the expense of current pricing would probably hurt sales (I would have grabbed an onsale Moto X for myself in that case), but adding a second model, maybe a phablet-sized one with a premium build and camera might sell well, especially if they were willing to also play the on-contract pricing charade.

3. Under what conditions could Google offer a free Nexus 5 without a contract?

None in my opinion. Despite the above argument that there is no monopoly issue here (which is technically true) it would lead to a TON of complaints from OEMs, and Apple and Microsoft would use it as lobbying point numero uno. In essence, Google would be opening itself to a ton of additional oversight scrutiny which could end up hurting their core business. More interesting would be if they could somehow manage to dramatically drive down the cost of a quality entry-level device that also encouraged people to notice prepaid pricing options. You know, something like this.

Feel free to discuss these topics or suggest other price-related ones.

Sure - the short version is that Google hurts itself if it upsets the applecart too dramatically. Having Samsung drop them would lead to a fierce market share battle - one I think Google would ultimately win, but at a much greater expense. Instead they are trying to quietly nibble at various consumer pain points and expand the market instead of stealing market share from existing Android OEMs. That's why the Nexus line continues to be a steal to those in the know, but not so obviously to non-techies. That's why the Moto X attempts to expand in a way that appeals more to iPhonesque users that prefer user experience over specs, and why the Moto G is an attempt to redefine the lowend. They are truly trying to "turbocharge" the Android market, without pissing off other manufacturers. Time will tell if they can walk that tightrope, but if push ever comes to shove they could certainly make a quality loss-leader phone at an even lower cost if they need to.

 

[Scott7217]

Most normal people, like some of my family members, are unaware that a $200 device on contract really ends up costing them $500+. So when they see a phone for $350 it's perceived to be expensive.

How important is the initial price point for the Nexus smartphone line? Last year, you could get an 8 GB Nexus 4 for around $300. The starting price for the Nexus 5 is $350, but you do get 16 GB of storage, a 1080p screen, and LTE in exchange for that extra $50. Should Google try harder to get the price back down to attract the average smartphone buyer?

 

[mrsmumbles]

How important is the initial price point for the Nexus smartphone line? Last year, you could get an 8 GB Nexus 4 for around $300. The starting price for the Nexus 5 is $350, but you do get 16 GB of storage, a 1080p screen, and LTE in exchange for that extra $50. Should Google try harder to get the price back down to attract the average smartphone buyer?

I don't think so. They don't mass market the phone and they know users want more internal storage, not less. I'd expect the Nexus phones to go up in price rather than down.

Sent from my LG-LG870 using Tapatalk 2

 

[Scott7217]

They don't mass market the phone and they know users want more internal storage, not less.

So, should we expect a 64 GB Nexus phone sometime in the future? I thought Google wants people to use the cloud, not internal storage.

 

[Scott7217]

I'd expect the Nexus phones to go up in price rather than down.

Do you think Google would ever eliminate the subsidy on Nexus phones altogether? Can the Nexus program survive without a $100 discount?

 

[jj14x]

Do you think Google would ever eliminate the subsidy on Nexus phones altogether? Can the Nexus program survive without a $100 discount?

I don't think Google will eliminate the subsidy. But I'm fairly sure that the Nexus program can take a hit of another $100, without too much of an adverse effect on sales.

Note: Most other Android phones retail (if purchased without contract) at $550 or $650. So the price of $350 is more than a $100 discount

 

[mrsmumbles]

So, should we expect a 64 GB Nexus phone sometime in the future? I thought Google wants people to use the cloud, not internal storage.

I have no idea what they will or won't do. I suspect that offering the 32 GB was more a concession to world markets where data is less accessible than to US customer's wishes. But that's just my own speculation. If Google had their way they'd probably still offer 4 or 8 GB storage phones - whatever the least is to carry the OS and app data for 2 years.

Sent from my Nexus 5 using Tapatalk 2

 

[JeffDenver]

Do you think Google would ever eliminate the subsidy on Nexus phones altogether? Can the Nexus program survive without a $100 discount?

What alternatives are there for the same product at that price range?

 

[Scott7217]

I don't think Google will eliminate the subsidy. But I'm fairly sure that the Nexus program can take a hit of another $100, without too much of an adverse effect on sales.

I certainly hope Google doesn't eliminate the subsidy. Still, it's good to know that there won't be a severe impact on sales if Google decides to stop subsidizing the Nexus line of phones.

 

[Scott7217]

If Google had their way they'd probably still offer 4 or 8 GB storage phones - whatever the least is to carry the OS and app data for 2 years.

Would it make sense to offer more storage options that hit different price points? Right now we have the 16 GB ($349) and 32 GB ($399) options covered. Should there be cheaper option and a more expensive option thrown into the mix, or is it enough to only have the current two options?

You also mentioned something about carrying the OS and app data for 2 years. Why focus on 2 years instead of 3 or more years? Is it merely because technology changes so fast?

 

[Scott7217]

What alternatives are there for the same product at that price range?

That is a good question. So far, there is only one Nexus phone on sale in the Google Play store at a given time. Should there be multiple Nexus phones released by different manufacturers in the same year? Would these manufacturers compete on price? For example, maybe you would have LG, HTC, Samsung, and Sony all release Nexus phones at the same time. Maybe we would end up with alternatives that would be cheaper than what we currently have.

 

[mrsmumbles]

Would it make sense to offer more storage options that hit different price points? Right now we have the 16 GB ($349) and 32 GB ($399) options covered. Should there be cheaper option and a more expensive option thrown into the mix, or is it enough to only have the current two options?

You also mentioned something about carrying the OS and app data for 2 years. Why focus on 2 years instead of 3 or more years? Is it merely because technology changes so fast?

It seems it may be too costly for manufacturers to produce more than 2 storage options (and I'm surprised they came out with two again last year). As for OS updates, again I have no idea but it seems the manufacturers of the hardware have something to gain if a phone stops receiving updates within 2 years.

Sent from my Nexus 5 using Tapatalk 2

 

[crxssi]

I have no idea what they will or won't do. I suspect that offering the 32 GB was more a concession to world markets where data is less accessible than to US customer's wishes. But that's just my own speculation. If Google had their way they'd probably still offer 4 or 8 GB storage phones - whatever the least is to carry the OS and app data for 2 years.

Had they not offered a "32GB" (note it is in quotes, since it doesn't have 32GB of storage, and THAT is barely adequate) I wouldn't have bought the Nexus at all. Cloud storage is not real storage. Flash is cheap, and it is 2014. 64GB now costs less than 32GB two years ago and 16GB four years ago. There is no valid reason not to start bumping up to 48 or 64 at this point unless it is purely political... and Nexus should be about choice, flexibility, and freedom.

The last thing on earth PHONES need are more cores- if they want to cut pricing, then start there!

 

[crxssi]

It seems it may be too costly for manufacturers to produce more than 2 storage options (and I'm surprised they came out with two again last year).

Then make a 16GB and a 64GB

OR- make a 16 or 32GB and give us back the SD card option and have just one model.

 

[Scott7217]

There is no valid reason not to start bumping up to 48 or 64 at this point unless it is purely political... and Nexus should be about choice, flexibility, and freedom.

You mention politics as a possible reason why Google doesn't increase the internal storage capacity. Do you have any theories? I've only heard of the idea that Google wants people to store everything in the cloud.

As for choice, flexibility, and freedom, I'm thinking that the Google Play edition phones are taking care of those factors. If you want stock Android, you can pay as little as $179 (Moto G) or as much as $699 (HTC One M8) to get it on the Google Play store.

 

[crxssi]

You mention politics as a possible reason why Google doesn't increase the internal storage capacity. Do you have any theories? I've only heard of the idea that Google wants people to store everything in the cloud.

And that is it, yes.

 

[LeoRex]

The last thing on earth PHONES need are more cores- if they want to cut pricing, then start there!

Well...I think the whole point with the multicore push is battery consumption... I think Franco made a post on G+ talking about it, but it is more efficient to have a fewer cores running at full speed than all cores running at lower speeds (a concept which his kernel is built around). When more oomph is needed, more cores come online.

Plus, a lot of archs are now using low power cores to take care of the menial tasks, leaving the high powered stuff for the grunt work (perfect example is the Moto X's X8 platform).

I have a 16Gb model and for how I use it, the lack of storage isn't really that big a deal. My music is all pushed into Play Music... and I don't listen to it heavily. But I have an unlimited data plan, so the data usage is a problem. I use the Google+ photo/video backup, so once things get pushed up, I remove the local copy... Other than that, the only need for local storage is ROM zips and multi-rom images.... Now that I've found a 'home' ROM (AOSPAL), I don't download many ROMs much anymore.

But everyone's needs are different, of course.

 

[mojo rising]

I prefer more storage on the phone as I usually listen to the music stored on the phone when on a plane or when on a road trip where I am often out of a good connection to the cloud.

 

[crxssi]

Well...I think the whole point with the multicore push is battery consumption... I think Franco made a post on G+ talking about it, but it is more efficient to have a fewer cores running at full speed than all cores running at lower speeds (a concept which his kernel is built around). When more oomph is needed, more cores come online. Plus, a lot of archs are now using low power cores to take care of the menial tasks, leaving the high powered stuff for the grunt work (perfect example is the Moto X's X8 platform).

If the multicores has a low-power core present, then I agree with you. But most chips are adding more and more *HIGH PERFORMANCE* cores, and phones will rarely, if ever, make use of those. 2? Sure. 3? Probably. 4? Rarely. 6 or 8? Give me a break.... it is just marketing at that point. So I was just saying that I would rather see more storage than more cores (beyond what is reasonably needed). Same holds for screen resolution. 1080P on a 5" screen is mostly a waste. I suspect 99% of people could never tell the difference between that and 1400x1050. And yet they are now pouring money into cramming even more pixels into that space?? Why?

At this rate, in the not too distant future we will end up with a 12 core phone (9 cores wasted), with 6GB of RAM (half the RAM wasted), a 3840x2400 5" screen (TONS of non-visible resolution), and a 32 megapixel camera (using a crappy little sensor and lens)..... and 16/32GB of storage from specs 5 years ago. It is ludicrous!

 

[3C0T3CH]

I use the "cloud" (both my own free one [no additional cost], and Google's free one) for all my media (music, video, pictures, etc.) storage for two reasons. One, so I can access it from any device (with internet connectivity), and two, because no amount of on-board storage on a mobile device is enough for me (nothing that they would be willing to make would be enough.). Just my installed apps take up about 3/4 the space available on my Nexus 5.

Aside from that, it should go without saying that on-board storage price differences between otherwise essentially identical phones/mobile devices are unjustifiably high. You aren't paying for the storage; you're paying for the lack of storage (on the "cloud," limitations/dysfunctionality, etc), and because you feel you have no other choice (whether you do or not), so prices can be raised to unjustifiably high levels. A current reasonable price for storage would be roughly $1 (USD) or less for 1GB. Even on-board/internal storage at half that price is currently viable for the end consumer (in the US) and the manufacturer/vendor for a storage capacity of up to 128GB on basically any device bigger than a fingernail.