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* * * * *

Have Google changed mobile phone pricing forever?


LG and Google's pricing of the Nexus 4 at £239 for 8gb and £279 for 16gb is breathtaking value for consumers and has frankly blown me away, but it begs the question; why can't other manufacturers hit this price point?

Google may well be selling this whole Nexus line at cost, but when you consider both the Samsung Galaxy S3 and the HTC One X had RRPs of closer to £500 at launch you have to ask the question why? Especially as the spec of the Nexus 4 is near as damn it the same as those two flagships?

Has the price of components come down that much in 12 months? Or have Samsung and HTC been walking away with £200 of profit on each phone for the last year? And mugs like us have been boosting their balance sheets?

This time last year, the Samsung Galaxy Nexus was another £499 phone, I know because I bought one at that. :( But Google are now somehow able to sell the Nexus 4 at half the price.

So what is the fallout from Google's new pricing? Will everyone else have to follow suit?

Have LG shot themselves in the foot? Who is going to buy the Optimus G now? 1) at a price more than the N4 and 2) with a bunch of LG bloatware/skin on it? Or any other LG phone for that matter?

Where does this leave the likes of ZTE and Huawei? They have been trying their damndest to produce cheap, but high end specs with the likes of the Grand X and Ascend D quad XL, but now those devices are right in the Nexus 4 price range. Surely a no brainer to go for the N4?

Not to mention the plethora of imports that we've been covering in 'Chinese Import Device of the Week'. The highly coveted Xiaomi Mi-Two is due to launch this week at £229, but why would you now import one of these when you can get the Nexus 4 for the same price and have no import/warranty/support issues or worries?

I'm wondering if the whole landscape of phone pricing is about to change? When you look at the spec sheet of the Nexus 4, realistically, what more can you get out a phone? So is £279 the new £499?

In the next 6 months can you really see Sony, HTC and Samsung touting their next flagships or high end devices at £450/£499? Will they really have that much better hardware that what LG have produced on the Nexus 4 to justify such pricing?

And what effect could this have on contract pricing? There is no way the Nexus 4 is a £31/month phone like Carphone Warehouse was advertising it at the other day. And O2 have pencilled it in at £36/month!!! Surely a lower unit cost price will bring down contract prices?

£10/month sim only and a £239 Nexus 4 looks the way forward to me.

Interesting times ahead and i've not even mentioned the £529 iPhone 5 and £450 Lumia 920. ;)

So you've got upto £300 to spend on your next phone, how do you spend it?

Nexus 4, ZTE Grand X, Ascend D quad XL, Xiaomi Mi-Two, Motorola RAZRi, something else?

What you going for and why?

Posted Image

About the author

Zarch1972's Photo
Zarch is a veteran gadgeteer who has owned everything from a Commodore VIC-20 to an iPhone 5S and much of what came in-between.

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35 Comments

Would you be going in for the 8gig version Paul?
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What I will do? Simply buy an N4 (I haven't decided if I need the 16GB yet) to replace my almost broke SanFran.

Frankly my budget was inintially even smaller than the Nexus 4 price point, but this is a bargain of the year and I'm willing to invest, as I'm pretty sure I won't need an upgrade in next two years.

RAZRi got my attention, but it was too little for too much. N4 at the same price - I'm buying day one.
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£6.90 a month SIM only for 12 month contract seems best to me (Three UK)

Unfortunately, I don't have the cash or credit to get the phone upfront so I'm going to have to go the O2 route :(
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£6.90 a month SIM only for 12 month contract seems best to me (Three UK)

Unfortunately, I don't have the cash or credit to get the phone upfront so I'm going to have to go the O2 route :(


What sort of allowances are on that contract?
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What sort of allowances are on that contract?


£6.90/month
500MB
200 minutes
5000 texts
12 months contract

http://store.three.c...ice_Pay_Monthly
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AlphaVision
Oct 31 2012 02:44 PM
So where can an International customer get the nexus from? The official site does not support my country (Bulgaria) :(
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£6.90/month
500MB
200 minutes
5000 texts
12 months contract

http://store.three.c...ice_Pay_Monthly


Ah, I need unlimited data, I'll stick with giffgaff
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razzmataz1478
Oct 31 2012 02:46 PM

£6.90/month
500MB
200 minutes
5000 texts
12 months contract

http://store.three.c...ice_Pay_Monthly


And plus £3 a month add on for AYCE Data, let's not forget :)
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Funny as I am in the exact situation outlined, looking to replace my Blade and I seriously didn't want to spend £400 plus on the current top phones, but then I was struggling to find a good balance between price and performance. Had considered the Chinese import route, but a little worried about support issues. I think the Nexus 4 hits the spot nicely and I am planning on getting the 16gig version as soon as it comes out.
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everett_psycho
Oct 31 2012 03:00 PM

£6.90/month
500MB
200 minutes
5000 texts
12 months contract

http://store.three.c...ice_Pay_Monthly


If you are averse to three as a lot of people seem to be tesco often do good deals, I think their current one is the same as threes but with 250 minutes for £7.50 a month. If you want to sign for 2 years you can get a free wildfire s as a backup handset or to sell on. I've never had issues with them, my phone thinks I'm on o2 so it has really good coverage.

As for the phone pricing, I get why they charge more, but Google seems to be following the approach the games industry does, so sell units at cost or even a loss then make your money back with the apps and content. Its worked well in gaming for years so it could work for mobiles too. Really think this on a contract would have to be between £20 and £25 to even consider though, who knows it might get us back down to 12 month contracts with a decent phone instead of this 24 month nonsense that's become the norm

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And plus £3 a month add on for AYCE Data, let's not forget :)


There is also topcachback/quidco available for 3.

I wonder if google have priced the new handset too agressively. There is no doubt that it's brilliant for consumers now (if you can live with 8/16GB) but might it cause some manufacturers to pull out of the android handset space and mean less choice in the future. Less choice might mean less innovation and higher prices later.
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Or have Samsung and HTC been walking away with £200 of profit on each phone for the last year?

Yep, im pretty sure that there is a healthy profit on each device, for the manufacturer, retail store etc.

I think part of the reason the galaxy nexus was quite expensive is that it was sold in quite small numbers and had quite a distinctive design which probably cost a bit to tool up the factories for. Im guessing google have taken a bit of a punt that they will sell a lot of devices at this price. Most devices drop at least £100 not too long after release once the one off costs have been covered and the phone isnt flavour of the month any more. I basically think google have included this drop in price from the start.

Cant wait to get my hands on a Nexus 4, definitely the 16Gb for me. Im not too worried about having massive storage for music with cloud services becoming better all the time. But i still want to be able to have a decent stash of music, take photos, install a few games etc, backup my phone once in a while and not have to worry about cleaning the SD card every few months.
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BiggidyBoing
Oct 31 2012 07:27 PM
Google and Amazon are basically saying "if you offer great services you can sell hardware without any profit".

Whereas Apple produces great hardware, but their services aren't as good, so they have to charge a premium price tag.

Where does Microsoft sit? They are charging £399 for a MS Surface RT tablet in the UK. Which means they are admitting Microsoft services suck. :)
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Google have priced it quite cleverly in my opinion. Premium phone users (£300+ budget) who would've bought a £500 device such as SGS3 or HTC One X will be bowled over at this price and many will buy a 16gb version.

The mid-range phone users (£200 - £300) will be bowled over by the great specs of a well priced phone and also buy one. Again, many will go for the 16gb version - which I imagine Google make more money off than the 8gb, which they probably won't be making much if any profit from the hardware sale (like the case of the N7).

Then comes the best part. Budget phone users (such as myself!) who usually wouldn't have paid over £100 for a phone (my previous 3 phones have been Orange San Fransisco, Orange Monte Carlo, and Huawei Ascend G300) are so very tempted at the look of this bargain, they would stretch to shelling out a fair bit of money for it (more than double their previous budgets).

I think they will do very well from this phone.

I just don't know if I can justify spending £240 on a phone...
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People should not need to upgrade for the life of the device and if it sells as well as I think it will, other phones wont sell too well for a long time to come, maybe forcing down the price anyway.
If it lasts as well as the original Nexus, we wil all be happy. Specs and price are mind blowing
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Whereas Apple produces great hardware, but their services aren't as good, so they have to charge a premium price tag.

Sorry Biggidy, but I couldn't agree less with that statement.

How can you say Apple's services aren't as good as Googles? Their content management, syncing and whole delivery eco-system blinds Android imho as I discussed in my Cloud article a few weeks ago: http://www.modaco.co...-they-all-that/

Don't get me wrong, if Google bring a revamped Music Manager to the table when Europe gets Google Music and 'matching' next month, then fair enough, my opinion may change. But right now, for me, Amazon and Google are playing eco-system catch up to Apple.
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essentially zte and huewei can no longer charge over £220 for their phones as nexus 4 is £240+del. Anyone paying £220 will pay the extra £28 because the spec is higher, less chinese govt spying problems and firmware updates quickly and better custom roms due to tons of users.

I'm still not prepared to pay this amount, the Huewei G330 is going on sale soon at around £150-160, i'll wait until that goes down to £120 and get one of those i think or one of zte ones with SGX544 and quad cortex a7 1.2ghz which is coming soon with a 4.3" 960x540 screen. Tegra4 is out in Q1 2013 with quad cortex a15 and kelper graphics so it will be a beast of a phone. Expect that to be the nexus 5, that i would possibly buy for £240+del but not with already outdated tech (krait cores) as cortex a15 is already out (dual core only atm).
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Phone pricing has changed. The google phone could really be cheaper but I guess Taxes have a lot to answer for.
It's missing a few features for an advanced user - LTE, better camera, 1080 screen, microsdhc.

Hoping the Nexus 5 if it happens will fix this and the price of the Nexus 4 will drop to 200, Nexus 5 300 or something.

e.g. new quad core ZTE u950 is $159. So suddenly the Nexus 4 really does look not such a great deal !!
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LTE is included in the tegra4 chip as they bought out a lte manufacturer a few months ago. 1080p screen on 4.7" is pointless, the dpi is too high to see. I'd like to see a 1600x900 or similar resolution though, that would be visible. I agree a better camera would be great. They were clearly trying to keep costs down to make it for this price. Maybe they will sell the nexus 5 for £275 and have a better phone. Hopefully. They also said why they didn't include microsd, i don't believe them, i think it is so that people buy the higher capacity phone and make a nice profit on those.
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everett_psycho
Oct 31 2012 11:03 PM
I wouldn't say apple is bad, if anything the icloud is the last thing I would love for Google to implement a version of in to android, especiay bow they have 3 nexus devices to share between, its really nice to work on one device and then the results are on your other. Apple is a premium product and generally speaking their core services are done well, then again decisions like going it alone for mapping hasn't helped their cause and android has really upped its game.

I think the n4 design is geared towards iPhone users, I personally know hardly any iPhone users that have gone for a model above the smallest capacity so for them 16gb would be fine and if at contract renewal time they get offered an n4 for free on £25 p/m plan or an iPhone for an upfront cost and £35 p/m I think they may start to be swayed.
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Just wondering, what's something like the ZTE Z5 going to sell for now?
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I think its an exciting time for us mobile fans, and I do see the pricing of the nexus 4 as a game changer for the uk market at least. Personally I am holding on to my g300 until the nexus comes with 32gb (I am video and game intensive and even the 32gb card on my phone is 70% full). Was gonna get a new phone before xmas for myself but will hold on.
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jonathanmusto
Nov 01 2012 10:30 AM
When can we officially order? I'm still paranoid that the pricing is a mistake and they're gonna stick an extra £200 on it so I wan't to get my order in ASAP! :-)
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When can we officially order? I'm still paranoid that the pricing is a mistake and they're gonna stick an extra £200 on it so I wan't to get my order in ASAP! :-)

Play Store says "Available for purchase on Tuesday, Nov. 13th"

Not sure if they'll change that and allow some pre orders?
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AlphaVision
Nov 01 2012 01:29 PM
Well guys, Google has answered your questions themselves:
https://www.youtube....4uMQqerA#t=850s
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