Google wouldn't be making a loss.

[Fairclough]

There are theories every where that Google is making a large loss of the Nexus 4. I believe that isn't the case, maybe a tiny loss as most by a few dollars, but why do I disagree....

Last month a Chinese Company called Xiaomi, Released a mobile called the Xiaomi 2.
Its specs were on par with the Nexus 4, same processor etc mind you it had a bigger front camera, larger screen by sharp etc.
This phone was sold for $310 USD, making a loss of 50 odd dollars per handset. Now lets look at Google.

Similar specs, worse camera...
Sells for $349 USD in America.... $39 more then Xiaomi's
Sells for $400 AUD which is $413... $103 more then Xiaomi's
Europe I have Nexus sells for even more.

So with this in mind, if Xiaomi loses 50 dollars, how will Google be making a major loss on it? Is it just proof that all the other mobile companies market their product up even higher above its actual cost of the unit maybe so. Oh a little fact too, Xiaomi sold out on the first day. In 2 minutes. Mind you they did do it apart of their market plan for free media - 50k units then 2 weeks later sometime this week another 250k units then 2 weeks later all on sale. Why? free advertising. Many haven't heard of this brand as its new and exclusive to China, but its my example at the moment the next Apple least over there. I am no accountant but this is my theory and belief. Let the abuse and flaming begin.




EDIT: I know this is a bit of the Nexus 4 topic the comparison but look at this. Xiaomi technology Software engineer profiles | LinkedIn Their team all consists of former IBM, Microsoft & Google staff.
Xiaomi's Bin Lin Talks About the Chinese Start-Up's Flagship Phone - Liz Gannes - Mobile - AllThingsD -> the phone they are making a loss on which this argument is based on.

 

[anon(847090)]

There are theories every where that Google is making a large loss of the Nexus 4. I believe that isn't the case, maybe a tiny loss as most by a few dollars, but why do I disagree....

Last month a Chinese Company called Xiaomi, Released a mobile called the Xiaomi 2.
Its specs were on par with the Nexus 4, same processor etc mind you it had a bigger front camera, larger screen by sharp etc.
This phone was sold for $310 USD, making a loss of 50 odd dollars per handset. Now lets look at Google.

Similar specs, worse camera...
Sells for $349 USD in America.... $39 more then Xiaomi's
Sells for $400 AUD which is $413... $103 more then Xiaomi's
Europe I have Nexus sells for even more.

So with this in mind, if Xiaomi loses 50 dollars, how will Google be making a major loss on it? Is it just proof that all the other mobile companies market their product up even higher above its actual cost of the unit maybe so. Oh a little fact too, Xiaomi sold out on the first day. In 2 minutes. Mind you they did do it apart of their market plan for free media - 50k units then 2 weeks later sometime this week another 250k units then 2 weeks later all on sale. Why? free advertising. Many haven't heard of this brand as its new and exclusive to China, but its my example at the moment the next Apple least over there. I am no accountant but this is my theory and belief. Let the abuse and flaming begin.




EDIT: I know this is a bit of the Nexus 4 topic the comparison but look at this. Xiaomi technology Software engineer profiles | LinkedIn Their team all consists of former IBM, Microsoft & Google staff.
Xiaomi's Bin Lin Talks About the Chinese Start-Up's Flagship Phone - Liz Gannes - Mobile - AllThingsD -> the phone they are making a loss on which this argument is based on.

well i agree that google is not selling the phone for a lose but i dont agree with the logic you have behind it.

you really cant compare LG with Xiaomi head to head.

LG has many manufacturing plants but Xiaomi dont. and making a device which is not well established would cost more. LG would have reduced the manufacturing cost by now.

Lg makes display/Battery and many other components unlike Xiaomi. manufacturing on large scale by yourself will cost less than buying from others. LG will save more here.

LG is well established with Nexus 4 because of LG Optimus G. since all the ground work is already done.

Cost of the phones not only depends on components but also depends on how much you sell. The more you sell, lesser the cost
X!!!!!! would have sold about 500k but Nexus will sell in millions. cost goes down for Google.

finally google makes more money from google play/Ads than the phones. Googles last year Mobile revenue was 8 billion which is approx 1/5 th of total revenue.

final notes: iphone's manufacturing cost is about $210.

 

[Fairclough]

Foxcom gets bent over my Apple but Apple gets bent over by the media for using Foxcom - Xiaomi might be doing to the same, uncertain of which company is doing it.. I Agree how it costs more money to buy the parts for Xiaomi e.g the screen from Sharp. I just found it interesting how people think Google will be making a loss when companies which it would be more expensive for them to do can do it also.

I did hear, that Google is going to make any short fallings up from the app market which is fair enough, personally I would do the same. I don't understand why other companies don't join in on a flat out price war. Besides the company profits will be smaller, but it gives them an greater chance for market share, more innovation and end better products.

Its pretty convenient for LG that the Nexus sets up its own line. I wonder if the Nexus will put LG from #2 in the prepaid market to a head of Samsung in the near future.

 

[gmen78]

Carriers charge way over because they want to DISCOURAGE you buying cheap (price not hardware cheap) phones and jumping around networks a la nexus 4. They want you locked in for 1-2 years and only way to do that is to charge laptop prices for smartphones. We all know the phones themselves cost 150-200 on average at cost.

Sent from my Galaxy Nexus using Tapatalk 2

 

[gone down south]

You need to differentiate the US and non-US markets, only Americans and Canadians get suckered into the 2/3 year subsidized contracts while the rest of the world pays full price for it's phones. I'm not sure that competitive forces would let the price of a phone stay so high if it was really that inflated.