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    Default The Nexus 5's Price

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

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

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

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

    Feel free to discuss these topics or suggest other price-related ones.
  2. #2  

    Default Re: The Nexus 5's Price

    if google offered a more expensive model, i'd figure there would be a better camera, better battery, better design materials etc. Basically general things that LG cut back on with nexus devices. Honestly imo i feel like other companies dont even care about the nexus 5's price. Where i live, im the only one walking down the street with a n5 so....
  3. #3  
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    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    1. How have other companies reacted to the Nexus 5's price?
    They haven't, and they won't. Google doesn't need to make money on the Nexus 5, while other manufacturers need to make money on their phones. Remember that carriers are selling the Nexus 5 with at least $100 premium over the Play Store price already. So "Nexus 5's price" isn't exactly a constant. If you are looking for industry impact from pricing from Google, look at the Moto G. It's a heck of a phone for $179 off contract. And Motorola is presumably making money on it. THAT has the potential to shape the market.

    Quote Originally Posted by Scott7217 View Post
    2. If Google offered a more expensive model, what would change?
    Define "a more expensive model." If the same exact phones sold for higher price, it would sell less. If it had better specs/features, it may well sell more.

    Quote Originally Posted by Scott7217 View Post
    3. Under what conditions could Google offer a free Nexus 5 without a contract?
    Other than a giveaway for special occasion, no condition. Why would Google offer a free Nexus 5? And "without a contract" has no meaning to Google, as the carrier and not Google would set the contract price. Google only sets the Play Store price, and that's always without a contract.
  4. #4  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    I'd like to discuss the price of the Nexus 5 and its consequences. Here are some topics off the top of my head:

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

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

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

    Feel free to discuss these topics or suggest other price-related ones.
    The Nexus phones are never advertised so these questions imo arent relevant. Its a developer phone mainly and seems it is going to continue to be so. Seems they just noticed a bigger demand and made it better than it has been. It still isnt advertised and isnt even on the biggest carrier.

    IMO the only answer to #3 is............ when you are dreaming.
  5. Thread Author  Thread Author    #5  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Brian Low View Post
    Honestly imo i feel like other companies dont even care about the nexus 5's price. Where i live, im the only one walking down the street with a n5 so....
    I think some companies view the low price as a threat. In particular, I think Verizon doesn't want the Nexus 5 on its network because a cheap flagship smartphone will allow people to continue their unlimited data plans. Verizon is forcing people to either pay full price for their phones or cancel their unlimited data. A Verizon Nexus 5 would lessen the sting out of that policy. The same would go for AT&T, but at least it's easier to get a Nexus 5 on that network because it's GSM.

    Sprint and T-Mobile are friendlier towards the Nexus 5, but they are also in 3rd and 4th place in the US mobile market. They need something to differentiate themselves from AT&T and Verizon. Unfortunately, they can't match the Google Play store on price. I believe a Nexus 5 costs about $450 off-contract in the carrier stores. I'm wondering why Google can't offer the same subsidy. If a full subsidy is not possible, maybe even a reduced subsidy would be fine.
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    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    I'd like to discuss the price of the Nexus 5 and its consequences. Here are some topics off the top of my head:

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

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

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

    Feel free to discuss these topics or suggest other price-related ones.
    It is normal for Google to offer Nexus phones cheap. So far there has been no real reaction from the vendors...the Nexus phones (deliberately or not) often lack features the vendor phones have, like SD or removable batteries. Google will not offer more expensive models because Google is not interesting in profiting from the sale of the hardware. They need the phones to remain cheap.

    Google will never offer the Nexus phones free. They can't. They'd get sued for predator business practices. They are probably pushing it just selling them as cheap as they are.
  7. #7  

    Default Re: The Nexus 5's Price

    1) Already happened with the Nexus 4.
    2+3) Total speculation that is unlikely to happen.
  8. Thread Author  Thread Author    #8  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by yfan View Post
    They haven't, and they won't. Google doesn't need to make money on the Nexus 5, while other manufacturers need to make money on their phones.
    What if consumers overwhelmingly choose the Nexus 5 over other phones? I'm talking about record-breaking sales. Wouldn't the other companies react in some fashion?
  9. #9  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    What if consumers overwhelmingly choose the Nexus 5 over other phones? I'm talking about record-breaking sales. Wouldn't the other companies react in some fashion?
    Well I suppose they would have to make some changes but all of that is very doubtful. Google doesn't want to put handset manufacturers out of business, they want as many Android phones out there as possible. Another thing to consider is you can get a flagship phone on contract for $200 at launch and $100 a few months later, most people don't buy phones off contract.
  10. #10  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    I think some companies view the low price as a threat. In particular, I think Verizon doesn't want the Nexus 5 on its network because a cheap flagship smartphone will allow people to continue their unlimited data plans. Verizon is forcing people to either pay full price for their phones or cancel their unlimited data. A Verizon Nexus 5 would lessen the sting out of that policy. The same would go for AT&T, but at least it's easier to get a Nexus 5 on that network because it's GSM.

    Sprint and T-Mobile are friendlier towards the Nexus 5, but they are also in 3rd and 4th place in the US mobile market. They need something to differentiate themselves from AT&T and Verizon. Unfortunately, they can't match the Google Play store on price. I believe a Nexus 5 costs about $450 off-contract in the carrier stores. I'm wondering why Google can't offer the same subsidy. If a full subsidy is not possible, maybe even a reduced subsidy would be fine.
    Verizon wants to stop unlocked phones to continue the contract phone marketing that they use as a primary lure to lock people into long term services contracts. Most people buy phones on 2 year contracts that initial out of pocket price for a expensive phone is very little $. Then these people that are locked in by contract over paying every month for 2 years for that expensive services when their are cheaper services available.

    T-Mobile has Metro-PCS for budget (AKA prepaid) services. T-Mobile/Metro are taking big market shares from AT&T and Sprint when they started the Bring Your Own Phone marketing. AT&T started AIO as their budget services and has just acquired Leap Wireless and Leap's Cricket prepaid brand. After the transaction's close, AT&T intends to combine the nascent operations of Aio with Leap's existing operations under the Cricket brand name," AT&T said in a recent FCC filing.

    Verizon isn't chasing the budget secondary service market. Verizon doesn't want Google changing the phone market to unlocked phones or help Google Wallet, since Verizon want the NFC Wallet $ and the long term contract phone systems.

    Last edited by Shilohcane; 11-21-2013 at 10:20 AM.
  11. #11  

    Default Re: The Nexus 5's Price

    They could offer them for free. They have no monopoly and predatory pricing does not apply here as there is no profit. Back to law school for you I guess.
    The Moto G is likely sold at about cost too.
    Other manufactures can't respond if they want to remain in business and actually make a profit. Since Samsung is the only Google/Android OEM making money and they won't say how much they are making, its pretty grim as it is for HTC as others.
    I agree with the Verizon statements. I'm sure they don't think it is in their best interest to sell Nexus devices. They don't like the precedent they set.
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  12. Thread Author  Thread Author    #12  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Rayzaa View Post
    The Nexus phones are never advertised so these questions imo arent relevant.
    I've been curious about that. At first, I thought Nexus phones weren't advertised because you would need an advertising budget for that, which would add more to the cost of the phone. However, the Nexus 7 tablet is pretty cheap, and I see ads for that all the time. ("What is glossophobia?")

    Is there a specific reason why Google doesn't advertise the Nexus 5? Maybe Sprint and T-Mobile could run the ads if Google doesn't want to.
  13. #13  

    Default Re: The Nexus 5's Price

    Nexus phones won't sell in huge numbers like iPhone and the Galaxy line because Google makes them with a very small % of smartphone market in mind. Most people don't care about unlocked bootloader, rooting and flashing custom ROMs. The average smartphone user cares more about other stuff like the camera and battery.
  14. Thread Author  Thread Author    #14  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by uh60james View Post
    Well I suppose they would have to make some changes but all of that is very doubtful. Google doesn't want to put handset manufacturers out of business, they want as many Android phones out there as possible.
    I can understand your point about Google not wanting to put other manufacturers out of business. Still, Google can't really control the popularity of the Nexus 5. If people like the Nexus 5, they'll buy it. Simple as that.

    So let's say there's a huge spike in Nexus 5 sales. People stop buying other smartphones because they love everything about the Nexus 5: the stock Android experience, timely updates, on-screen buttons, affordable price, and so forth. Would Google limit Nexus 5 sales or even cancel the entire program in the event it becomes too successful? I'm talking about a situation where the other manufacturers are taking a beating in their revenue and only Google and LG are making money.
  15. #15  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    I'm talking about a situation where the other manufacturers are taking a beating in their revenue and only Google and LG are making money.
    We can discuss that situation when it happens. It's too far too see at this time.

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  16. #16  
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    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    I'd like to discuss the price of the Nexus 5 and its consequences. Here are some topics off the top of my head:

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

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

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

    Feel free to discuss these topics or suggest other price-related ones.
    1. Business as usual.

    2. Better specs?

    3. If Google had the balls to completely blow up the industry, they'd do it.

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    Default Re: The Nexus 5's Price

    Quote Originally Posted by SactoKingsFan View Post
    Nexus phones won't sell in huge numbers like iPhone and the Galaxy line because Google makes them with a very small % of smartphone market in mind. Most people don't care about unlocked bootloader, rooting and flashing custom ROMs. The average smartphone user cares more about other stuff like the camera and battery.
    Agreed.. The average person likes the features baked into companies skins.. They purchase phones based on those features.

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  18. Thread Author  Thread Author    #18  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by snookasnoo View Post
    They could offer them for free. They have no monopoly and predatory pricing does not apply here as there is no profit.
    I was toying around with the idea of a free Nexus 5 because Google doesn't really make its money off of hardware sales. It is interested in user data, mostly for advertising purposes. If there are more users, there are more data for Google to analyze. More people will get a Nexus 5 if the price is right, and a $0 off-contract price is very compelling.
  19. Thread Author  Thread Author    #19  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by yfan View Post
    Define "a more expensive model." If the same exact phones sold for higher price, it would sell less. If it had better specs/features, it may well sell more.
    At the moment, I'm wondering if Google should release a Nexus phone at the $500 price range. The most expensive Nexus 5 in the Google Play store costs around $400. The cheapest Google Play edition phone (the HTC One) costs around $600. It might be interesting to put a phone between those two prices. I'm thinking that at $500, you could probably put extra storage and maybe a bigger battery into the Nexus 5.
  20. #20  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    I'd like to discuss the price of the Nexus 5 and its consequences. Here are some topics off the top of my head:

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

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

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

    Feel free to discuss these topics or suggest other price-related ones.
    Thought provoking, I'll take a stab at this.

    1. Not to my knowledge. The Nexus line isn't usually popular with the normies (normies being those that don't frequent sites like AC, and just use their phones normally). 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.
    I don't think that are OEM's are threatened at all. Google doesn't advertise the Nexus line as much as say Samsung or LG does with their devices.

    2. I'm assuming by more expensive, you mean a no compromise Nexus. I'd buy one.

    3. Probably none unless they make some sort of deal with carriers. I doubt they will do that anytime soon with that Galaxy Nexus fiasco.


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    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    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.
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  22. Thread Author  Thread Author    #22  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by deadp1xel View Post
    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?
  23. #23  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by Scott7217 View Post
    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.

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  24. Thread Author  Thread Author    #24  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by mrsmumbles View Post
    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.
  25. Thread Author  Thread Author    #25  

    Default Re: The Nexus 5's Price

    Quote Originally Posted by mrsmumbles View Post
    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?
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