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The Nexus 4, priced at $299, raises the bar for all smartphone manufacturers in a BIG way
But although we kinda knew that this would happen for the past month or so, few weren’t surprised to learn that Google Nexus 4 will sell for $299 unlocked in its 8GB version. In a market where high-end smartphones are usually priced at roughly $600 unlocked, the Nexus 4 is a steal, and I’m willing to bet a six pack that numerous Android fans and users will jump on the Nexus 4 bandwagon during this holiday season.
However, this is not the first time we’ve seen Google aggressively pricing a Nexus device. The Nexus 7 tablet has sold better than any other Android tablet since it was released back in June this year, and has established a new standard for budget tablets.
Nexus 4 – Nexus 7: the analogy
In the world of mobile technology it’s really all about timing and component life cycles, so if we’re to take a quick look at the specs on the Nexus 7, we’ll notice that the Nexus 7 packed components that were considered top-end roughly six months before the tablet actually hit the market:
– 1 GB of RAM was the standard for high-end Android devices starting early 2012
– Tegra 3 SoC was the SoC to crave for back when the international version of the HTC One X had just been launched (April 2012).
– PPI densities of roughly 250 were considered to be the minimum required for high-end Android devices starting with the time period before the 2011 winter holidays
What Google did at the time of the Nexus 7 launch was to offer specs that were roughly mid-end at the time and price the end product so that it falls in the budget tablet segment. In these conditions, although the Android tablet market has yet to reach maturity, the Nexus 7 was a success (and will continue to be one). At the time being, the Nexus 7 owns both the budget and mid end sectors of the Android tablet market.
On to the Nexus 4, this is actually a device that features top-end specs at the time of its launch:
– The Snapdragon S4 Pro (1.5 GHz quad-core Krait processor and Adreno 320) is the fastest platform in the Android ecosystem, one that only a limited number of smartphones are currently using (the LG Optimus G is one of them, obviously)
– 2 GB of RAM is spec feature available on only a limited number of smartphones
– A PPI ratio of 320 (non-Pentile) is about as best as they come
So, at the price of $299 unlocked, the Google Nexus 4 is actually a top-end Android smartphone, priced at less than the entry-level Samsung Galaxy Ace 2. As far as spec battles go, I cannot name an Android smartphone that can top the Nexus 4. Sure, 8 GB of internal storage space might seem too little for most hardcore smartphone users, but the 16 GB version also represents a great deal as well: it costs just $349 unlocked.
Google vs Android OEMs
But now that we’ve concluded that the Nexus 4 is even more of a steal than the Nexus 7, let’s take the time to consider what could this mean for Google. So let me ask a simple question: if the Nexus 7 was a success in a market where the Android OS is struggling, how many people will line-up to buy the Nexus 4 smartphone, taking into context that Android is the undisputed king of the smartphone OS market? My bets are on “a lot”!
But what does the Google Nexus 4 mean to other Android manufacturers? As far as I’m concerned, the announcement of the $299 Google Nexus 4 comes as a disaster for all Android smartphone manufacturers out there: why would you get a mid-end Android smartphone anymore when you can get the fastest Android smartphone in the world at an even price? And why get the Samsung Galaxy S3 now that you can spend almost half the money on a smartphone that is not only better spec-wise, but one that will be the first to receive future Android OS updates?
This is the true power of Google: since the search giant makes money out of the ads served inside Android, it can afford to sell the Nexus 4 smartphone at no profit. Contrarily, all of the other smartphone manufacturers make profit out of their premiums: they have to sell at profit to keep their business alive since they have no alternative revenue streams.
The only manufacturer that has anything to gain from the entire Google Nexus 4 business is LG. And that for a couple of reasons:
a) If the Google Nexus 4 does sell many units, LG’s sub-companies that manufacture the display, the camera, the plastic and the battery earn lucrative contracts.
b) If the Google Nexus 4 is well received by Android fans, LG will wash out all that negative rep that the OEM has earned during the past couple of years
The Motorola / Google Nexus smartphone
Take a quick look at what Google is able to accomplish by collaborating with hardware partners that it does not own: it has reignited interest in the Android tablet market via the ASUS-manufactured Nexus 7, and now is preparing to take by storm the smartphone market via the LG-manufactured Nexus 4.
What will happen when Google starts using Motorola as a manufacturer for Nexus devices? Both ASUS and LG are surely making some profit out of their Nexus partnerships, so Google could actually spend less on each device by using Motorola as a partner. Some claim that this will turn into profit for Google when it starts putting its backyard manufacturer to good use, while others claim that Google could try to price its Nexus products even more aggressively and outright destroy all the other Android OEMs out there. There’s no way of telling for sure, but it sure makes for an interesting prospect!
No matter how things evolve from now on, one thing is certain: the Google Nexus 4 raises the bar for Android smartphone manufacturers in a BIG way. It will be hard competing with Google’s Nexus 4 during this year’s holiday season, and I’m sure Q4 2012 financial reports coming from all smartphone manufacturers will prove me right.
What do you guys think? Can you think of a scenario where the vast majority of Android fans will choose any other smartphone for at least the next three, four months? Let us know in the comment section below!