Wow:
http://www.androidauthority.com/google-pixel-xl-bill-of-materials-724542/
CC
As much as I want to say, wow that is so cheap for materials compared to profit I can't. R&D is probably just as expensive and if you think you could source and make this phone yourself you sure could put Google out of money. That is a pretty big profit margin though!
If you think Google is greedy, check out apple: http://www.zdnet.com/article/heres-how-much-the-iphone-7-costs-to-make/
It costs less for an iPhone than pixel at base parts cost
Yep I'm okay with this... Maybe it will knock apple down a bit as this phone is solid AF.. My problem is the fact that Google or alphabet is absolutely dilusional if they think they can compete with Samsung or apple by going Verizon exlusive. Not bashing Verizon but this was decision had to have been made by a Walmart greeter or a fox news broadcaster based off "facts"
Sent from my Pixel using Tapatalk
Those components are cheap as hell. 50 for a SD 821 wowowow.
Sent from my SM-N9005 using Tapatalk
cost
amcolash said:
As much as I want to say, wow that is so cheap for materials compared to profit I can't. R&D is probably just as expensive and if you think you could source and make this phone yourself you sure could put Google out of money. That is a pretty big profit margin though!
If you think Google is greedy, check out apple: http://www.zdnet.com/article/heres-how-much-the-iphone-7-costs-to-make/
It costs less for an iPhone than pixel at base parts cost
Click to expand...
Click to collapse
Yes I agree Apple is just as greedy! When will this come to an end. It used to be that we could get a good quality phone from Google (Nexus line) at a great price. Now everyone is a pig on profits. Who loses, we do.
CC
And yet I trust Google more than a lot of the cheaper Chinese phones that might have similar specs because of brands
These bills of materials are only a fraction of the cost of the phone to the manufacturer. First off, those totals represent the cost to build for HTC and Foxconn, not what Google and Apple pay them to be the ODM. R&D is a huge budget, advertising is a huge budget, setting up things with banks and insurance companies for financing and protection plans is expensive. I'm sure the uBreakiFix partnership is expensive, but nothing compared to the network of retail stores Apple has. Apple spends a ton on software exclusive to their devices. If Google really keeps Assistant exclusive to the Pixel line, then their most expensive software is also dependent on device sales. Then you have to throw in the payroll and benefits of the thousands of high paid employees that worked on these phones. Carrier partnerships. Network licensing. The list goes on and on. Materials are but a fraction.
joshm.1219 said:
These bills of materials are only a fraction of the cost of the phone to the manufacturer. First off, those totals represent the cost to build for HTC and Foxconn, not what Google and Apple pay them to be the ODM. R&D is a huge budget, advertising is a huge budget, setting up things with banks and insurance companies for financing and protection plans is expensive. I'm sure the uBreakiFix partnership is expensive, but nothing compared to the network of retail stores Apple has. Apple spends a ton on software exclusive to their devices. If Google really keeps Assistant exclusive to the Pixel line, then their most expensive software is also dependent on device sales. Then you have to throw in the payroll and benefits of the thousands of high paid employees that worked on these phones. Carrier partnerships. Network licensing. The list goes on and on. Materials are but a fraction.
Click to expand...
Click to collapse
Plus support costs, customer service, product management, testing, manufacturing support, etc.
amcolash said:
And yet I trust Google more than a lot of the cheaper Chinese phones that might have similar specs because of brands
Click to expand...
Click to collapse
HTC is from Taiwan.
That teardown is amazing!!!!!!
This means that the compass is not the same we had in the 5X and the 6P? (Bosch BMM150). That could finally solve the issues I had with three nexus 5X with the compass losing the calibration in a few hours or just getting crazy at some places!!
According to the teardown, the Pixel compass is: AK09915
This could partially solve my question about how good is the compass in the Pixel, at least I won't expect same terrible behavior as in 5X and 6P.
This is the part people don't understand. They say "oh it only cost 250-300 dollars to make... The phone is over priced, google is ****ing greedy!"
Bill of materials is a fraction of the cost. Customer service, research and development, advertising, supply chain management, employee salaries and benefits, etc. That's all budgeted out before they even determine a price which in turn determines the price... It's called business and economics which the general population doesn't understand...
Related
As much as I love the device but the true cost to make the tab is $205. I bought it around $650+tax (AT&T). Feeling guilty... Yes, you have to make profit but that's a lot of profit...3x time the cost.
Why can't Samsung sell the device directly to us (without going through carrier)?
quattr0 said:
As much as I love the device but the true cost to make the tab is $205. I bought it around $650+tax (AT&T). Feeling guilty... Yes, you have to make profit but that's a lot of profit...3x time the cost.
Why can't Samsung sell the device directly to us (without going through carrier)?
Click to expand...
Click to collapse
That may well be the cost of outright manufacturing, but it is the cost of development and testing that they have to make up, therefore charging such a retail mark-up.
That price only includes the cost of materials. What about the cost of labor or design or the cost of the manufacturing process? How much does that add to the final price?
That may be the cost of the hardware side of it, but as you know hardware just doesn't cut it with the Tab the need to tinker with the software and whatnot to make it work in some way.
So for argument sake lets say:
Hardware: $205
Software: $205
Right there is $410. Then lets say that samsung actually wants to make some profit so:
Main price: $410
Profit: $100
so thats $510, then the 4 major carriers have to make money somehow on top of that.
P.S. - Sorry if this was a log post; I got caught up in the moment.
Even If the price is $205 it is well worth it. After using it i can that it is a solid device.
Many forget shipping, duties for electronics, marketing, R&D, and others. It adds up quick.
Sent from my PC36100 using XDA App
quattr0 said:
As much as I love the device but the true cost to make the tab is $205. I bought it around $650+tax (AT&T). Feeling guilty... Yes, you have to make profit but that's a lot of profit...3x time the cost.
Why can't Samsung sell the device directly to us (without going through carrier)?
Click to expand...
Click to collapse
Typically cost of materials constitutes only about 20-30% of sale price. The rest is marketing, distribution, support, software development and updates, etc.
Returned devices are another contributer to the sale price.
It looks to me that Samsung selling it on the edge of profitablility. Comparison with iPad should account for extra profits that Apple gets from software sales. My guess it is covering a good portion of that marketing/distribution expenses.
quattr0 said:
As much as I love the device but the true cost to make the tab is $205. I bought it around $650+tax (AT&T). Feeling guilty... Yes, you have to make profit but that's a lot of profit...3x time the cost.
Click to expand...
Click to collapse
It's already been said, but this is a real bug bear of mine, so I feel the need to post!
Companies like iSuppli provide details of the cost of "bill of materials" (BOM), which is a list the components that go into making a device. Whilst iSuppli themselves make it clear that they are talking about the BOM, the media just looks at the cost, compares it to retail, so that consumer can draw the erroneous conclusion that they are being ripped off.
In reality, the actual component cost is often way less than 50% of the total cost to actual manufacture, market, distribute, sell, and support a product.
I don't know for sure of course, but I wouldn't be at all surprised if Samsungs profit on a $650 Tab is less than $100. The carriers themselves are probably making next to nothing per Tab, because they are hoping that each Tab sale either involves a lengthy contract, or that you'll be spending a lot of money on prepaid data.
Regards,
Dave
No offence, but this thread is irrelevant. Every device costs next to nothing these days.
If you wanna talk about overcharging, talk about football players wages.
Sent from my GT-P1000
just be glad you dont smoke ciggarettes, those are like 2cents a pack to make. and cost 10 dollars to the consumer.
Your tab wont give you cancer either , yet.
These threads crack me up because they show how little business knowledge most tech people have.
Sure you could make a tab for $205 if you stole the design, and software. Oh yeah, you would also have to buy the components in bulk lots of several million to get those kind of prices.
The truth is that even if it does only cost Samsung $205 to manufacture the Tab, they will loose money on every unit sold until they hit their break even which will be in the multi-millions of units sold.
R&D is the biggest expense in the technology business. Marketing and distribution are not cheap either. The raw parts are often the cheapest part of the equation.
So as hawk2k8 has posted about, the Motorola site doesn't have the 'Buy Now' on their website right now (at least temporarily) and the speculation goes... it could be a price change, out of stock, or revamping the listing to add Flash and 4G info. So let's play out the price change part of it for a little fun!
My thoughts are that it seems a bit odd that they have the 3G/4G price at $800 and will put out the wifi version a full $200 below. I just can't imagine a vendor having that large of a separation between the models. And yes, I know their rep said it would be around the $600-ish mark, not debating that, just saying its a big difference for having 3G/4G. It would be an even bigger difference if the wifi sold at $539 as that 'Android 2.0 Homeycomb' sign showed.
So, what IF! What if they dropped the price of 3G to $599. Then the wifi model at $539 wouldn't sound so odd. Then maybe they give the early adopter buyers a $100 rebate so the pain of buying early wasn't so bad. Those that bought from stores like Costco would likely return it if the window was large enough and the wifi version came out during their return window. But my guess is most will be in the 14-30 day window and not return it. Or maybe Motorola will not give a rebate and just say that you paid for the experience of the XOOM as an early adopter.. who knows..
So let's stir up some fun speculation. I said FUN! Let's hear it! What's your wild speculation if they did change the price?
I'm certainly no marketing expert but I know my friends that have Apple products and those that have Android products are pretty much different when it comes to technology. Apple, its like no thinking involved, you want a movie or song plug it in and iTunes does all the work. Xoom, not so easy. Motorola/Google/Android really need something that simple. Apple, you don't think about encoding settings, and for the masses thats great. With the Xoom, there is so much confusion with "experts" trying to decide how to encode a movie; I don't use mine for movies so I don't follow it closely.
To answer your question with my two cents, if they want to compete with the iconic iPad, a great device (I have one), they need to get an iTunes like program. If they don't have that they'll never appeal to the average consumer with this type of device and will be on the fringes of the tablet market. Motorola Media Link got pretty good reviews (I never tried it with my Droid or DX) and why this isn't ready for the Xoom, Jha should hang his head in shame.
If you're shopping in Best Buy for a tablet, the ipad 2 is $600, what would it take to even consider the Xoom? I think the Xoom would have to be at least $75 south of a similar spec'd ipad to get someone that wants a tablet to take a good look at it.
So to be sure I stem the potential... I don't want this be an ipad v. xoom controversy. As they say, let's keep it to the facts m'am. Just want to hear ideas about pricing speculation. =)
@OP
I think Moto will stick to the original MSRP, at least for a while. Until April, the Xoom will still be the only HC tab in town.
Part of the high pricing is to establish brand position (i.e. Xoom "is a premium product") in consumers' mindset, and not so much about getting more money. Part of it is to protect the smartphone pricing model, given that Moto sell smartphones at ~$500 price point, and a tab is considered as "smartphone-plus", which should command $500+ pricing. If Moto/Samsung/HTC/et al sell tabs at the "laptop" pricing model, there would be considerable downward pressure on their present smartphone pricing.
For laptop vendors, eg Acer/MSI/et al, there is no such dilemma, and their HC tabs will start at around the $400 point. Asus and Dell have smartphone aspirations, and will stick with the "smartphone" pricing model.
The Apple iPad2 is the 800-lbs fly-in-the-ointment in all this. But in econ terms, the demand for either product (iPad2 or Xoom) is relatively price-inelastic, i.e. you aren't likely to buy either on the basis of pricing. Anyone who buys a Xoom at this point is an early adopter who wants to try Android's latest, and price isn't a significant factor. People who buys iPad are likely already partial to the iOS ecosystem, and at this point Apple's simply is more mature and user-friendly. So, while fodder for arguments, relative pricing is not a major factor.
@mgerbasio
Normal users don't do video transcoding, period. For that, the Xoom can be made as simple as Apple's if that's desired. All that's needed is a suitable preset. That's what the early adopters are hashing out. The same occurred for the Apple iPad.
If sales are as bad as the rumors indicate, then I would make the following decisions if I was Motorola:
1. Start a heavy marketing campaign. HEAVY-Hire an advertising firm that will blast the information about the Xoom everywhere. Spend some freaking money.
2. Sell the 3G/4G model at a $599 price point for the 3G/4G, would draw some interest.
3. Sell the WIFI version for $479.00 This $539 price we have seen is a marketing failure. Nobody prices a product at $539. This is simply a dumb, dumb move. $499.00 should be the Max price for the WIFI version.
4. Offer immediate credit to anyone who purchased the Xoom previously. Rebate?
5. Get Verizon to dump the $35, re-activation fee. That is stupid.
6. You need to make a killing on the accessories, and you can't do that without your main product selling. Selling the 3G/4G at cost isn't a bad move, and it certainly wouldn't hurt Motorola. Your not losing money at cost, your just not making any money on your main product. However, you should be making money on the WIFI version.
I was thinking about it and its one of 2 things imo. I think they are using the extra bucks for the future LTE expansion, building towers and whatnot. But most likely they are a bunch of grubby pricks that want to nickel and dime us
Sent from my HTC Sensation using XDA
I've read through a lot of the huge thread, and a lot of people were saying that t-mobile tends to offer the new, hip device for an outrageous cost for the first few weeks.
If you are a current customer you might have luck calling customer service and passively threatening to switch carriers. Many people here have had luck getting $200 off the phone and a few other perks. The last 10 pages of so of the big thread are full of those stories.
I bought the phone outright. The value plan I'm on is sweet- I'm saving $450 over 2 years.
Lets hope for the first and realize this phone is actually a phone that I might keep for the 2 years for a 1st haha. There is no real reason I don't think except the fact that T-Mobile has the cheaper of the plans when it comes to the competing 3, so the 80$ more that I have to spend to get the phone compared to the 25-50$ a month I save (comparing to my friends who have Verizon and At&t I'm okay with the difference... But still wish it wasn't the case.
I'm rocking the Motorola Cliq. This phone is going to seem so amazingly quick. If I can get 2 1/2 years out of a pos phone like the Cliq I can get 2 years out of this sexy phone.
I'm just happy that I am still out of contract.
mhuckins said:
I'm rocking the Motorola Cliq. This phone is going to seem so amazingly quick. If I can get 2 1/2 years out of a pos phone like the Cliq I can get 2 years out of this sexy phone.
I'm just happy that I am still out of contract.
Click to expand...
Click to collapse
GOOOooo should've went to the G1 haha.
mt3g said:
GOOOooo should've went to the G1 haha.
Click to expand...
Click to collapse
I almost did! I didn't want to move away from the qwerty keyboard. I've spent so much time on the computer in the last year I couldn't justify another partial upgrade. I was so close to buying an iPhone (they get upgrades, my cliq is like 1.8 or some lousy shiat) and then the SGSIII came along. I haven't slept in weeks. It's like the raspberry pi all over again.
MacTheRipperr said:
I was thinking about it and its one of 2 things imo. I think they are using the extra bucks for the future LTE expansion, building towers and whatnot. But most likely they are a bunch of grubby pricks that want to nickel and dime us
Click to expand...
Click to collapse
Spit-balling...
T-Mobile's Value plan is supposed to encourage customer's to avoid the recent spate of aggressive phone upgrades, and they are realizing that smartphone users are unaffected by the economic argument as the situation stands.
The phones actually are more expensive than we tend to think, and even "no-commitment" pricing has been subsidized.
The worldwide currency shifts have affected the cost of phones, and most carriers have been reluctant to reflect reality in a highly competitive market.
High demand and low supply resulted in either a money-grab or an attempt to prevent people from buying up the limited supply and selling on eBay (the latter being, admittedly, unlikely given the nature of the mobile market).
Executives have started to notice that the "free phone" weekends have been eating into profits and T-Mobile is attempting to capitalize on eager buyers that clearly aren't willing to wait until the inevitable deal comes along.
The unusual modem and/or overall lower volume of T-Mobile's sales meant that they weren't able to negotiate a deal as aggressive as the larger players.
T-Mobile has an interest in seeing HTC succeed and are attempting to subtly curb the Goliath that is Samsung in an attempt to keep their leverage going.
Pricing is not related to anything other than an attempt to place devices into tiers (with the S2 at $550, the One S at $600, and the S3 as the perceived-best phone), and they didn't expect a backlash against the better phones costing more money.
T-Mobile is attempting to expand its image as the "value" service by leaving room for negotiation so that bargain-conscious customers talk them up.
Don't take any of the above too seriously. It is kind of late, I haven't put much thought into it, and I've had a lot to drink.
In any case, relative value is relative value. I don't care that Redbox is losing money renting to me for $0.70, it makes me unwilling to pay for Blockbuster Express at $3. I don't care that an album costs $7 at my preferred service of Amazon MP3, I am unwilling to buy because Google Music has it $4. At the end of the day, the (vocal) minority of us that hang it forums like this will sweat the price difference because we spend all of our time comparing like items.
It isn't even remotely fair to T-Mobile (or whomever), but it is human.
Voltage Spike said:
Spit-balling...
T-Mobile's Value plan is supposed to encourage customer's to avoid the recent spate of aggressive phone upgrades, and they are realizing that smartphone users are unaffected by the economic argument as the situation stands.
The phones actually are more expensive than we tend to think, and even "no-commitment" pricing has been subsidized.
The worldwide currency shifts have affected the cost of phones, and most carriers have been reluctant to reflect reality in a highly competitive market.
High demand and low supply resulted in either a money-grab or an attempt to prevent people from buying up the limited supply and selling on eBay (the latter being, admittedly, unlikely given the nature of the mobile market).
Executives have started to notice that the "free phone" weekends have been eating into profits and T-Mobile is attempting to capitalize on eager buyers that clearly aren't willing to wait until the inevitable deal comes along.
The unusual modem and/or overall lower volume of T-Mobile's sales meant that they weren't able to negotiate a deal as aggressive as the larger players.
T-Mobile has an interest in seeing HTC succeed and are attempting to subtly curb the Goliath that is Samsung in an attempt to keep their leverage going.
Pricing is not related to anything other than an attempt to place devices into tiers (with the S2 at $550, the One S at $600, and the S3 as the perceived-best phone), and they didn't expect a backlash against the better phones costing more money.
T-Mobile is attempting to expand its image as the "value" service by leaving room for negotiation so that bargain-conscious customers talk them up.
Don't take any of the above too seriously. It is kind of late, I haven't put much thought into it, and I've had a lot to drink.
In any case, relative value is relative value. I don't care that Redbox is losing money renting to me for $0.70, it makes me unwilling to pay for Blockbuster Express at $3. I don't care that an album costs $7 at my preferred service of Amazon MP3, I am unwilling to buy because Google Music has it $4. At the end of the day, the (vocal) minority of us that hang it forums like this will sweat the price difference because we spend all of our time comparing like items.
It isn't even remotely fair to T-Mobile (or whomever), but it is human.
Click to expand...
Click to collapse
I wish I could write so eloquently when drunk. What's your fark handle?
It's sort of amazing to see people complaining about the "high" price without factoring in the total price of the contract or looking at the ETF. Worrisome.
Last year the GS2 and Amaze 4G were priced in the mid $200s so this seems pretty normal for T-mobile. T-mobile has also mused about contract pricing and how it is affecting their competitiveness and bottomline. Since the phone is untouched mostly there were probably other concessions that T-mobile wanted with Samsung on pricing. Then of course this phone is even more feature packed than the last, and you can't remove components once you place it in your previous flagship model (the GS2) so they are getting more and more expensive.
I don't think ETF factors much, unless you are some crazy person who likes to break contracts all the time and can't wait out the 2 years. T-mobile contract prices are lower, sure, but not by much.
Why doesn't anyone incorporate how much the plans cost prior to complaining about the cost of the phone?
I remember reading somewhere that stated studies show customers are more prone to sign with a carrier based on the price of the phone instead of the rate plan.
Let's wise up, fellas. Don't be a poor consumer.
tmobile is the only company selling the phone at this point, and in limited markets at that. I am wondering if they're selling the phone at such a high price in the beggining because they know they can. Look at the overwhelming demand coupled with such a limited supply. It's an easy cash cow. Im wondering if I should wait out and see if the price will go down in the next few weeks. ATT and Sprint are both selling 32gb at 600 and tmobile is selling them at 670 but like I said before Tmobile is the only one selling them at this point and they're pretty much done in Manhattan (i called a bunch of stores already).
ttngu234 said:
Why doesn't anyone incorporate how much the plans cost prior to complaining about the cost of the phone?
I remember reading somewhere that stated studies show customers are more prone to sign with a carrier based on the price of the phone instead of the rate plan.
Let's wise up, fellas. Don't be a poor consumer.
Click to expand...
Click to collapse
The purchase of the phone is the only time they have to fork out a bunch of money so it makes sense that the cost will drive many consumers. For the most part, the rate plan costs are similar across the market. Yes, Verizon is the most expensive but they have a reputation for offering the best network and that allows them to charge a premium.
Sergent D said:
The purchase of the phone is the only time they have to fork out a bunch of money so it makes sense that the cost will drive many consumers. For the most part, the rate plan costs are similar across the market. Yes, Verizon is the most expensive but they have a reputation for offering the best network and that allows them to charge a premium.
Click to expand...
Click to collapse
Not really. AT&T and Verizon are both equally expensive, and while Sprint is a bit cheaper (comparable unlimited talk/text plans closest to T-Mobile's 5GB web/tethering in this case), you're still paying a substantially bigger amount over the 2 years even with a cheaper phone.
is there any chance of nexus 4 going on sale on black friday?
also have earlier nexus devices gone on sale?
kashsih93 said:
is there any chance of nexus 4 going on sale on black friday?
also have earlier nexus devices gone on sale?
Click to expand...
Click to collapse
Through carrier (T-Mo) yes, decent chance. Through the Play Store, I highly doubt it, rumor has it Google is already subsidizing each phone to the tune of nearly $400
I highly doubt Google is subsidizing these phones. And regarding the black friday sales, I doubt there will be any for this phone…I'm sure it will sell just fine at the current pricepoint.
Sent from my Galaxy Nexus
USSENTERNCC1701E said:
Through carrier (T-Mo) yes, decent chance. Through the Play Store, I highly doubt it, rumor has it Google is already subsidizing each phone to the tune of nearly $400
Click to expand...
Click to collapse
The phone wouldn't even cost $400 to manufacture
edit: I have just read the article posted and what a load of rubbish it is!
selling for $400 below what is usually expected of a high end android phone IS NOT subsidising the phone! Subsidising is selling for less than the cost to manufacture a distribute. The phone is self will cost c.$150 to manufacture (maybe less) plus 5-10% to distribute.
GR36 said:
The phone wouldn't even cost $400 to manufacture
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Click to collapse
Granted there are a lot of sites out there showing it cost ~$200 to manufacture a phone. Such as http://wiki.answers.com/Q/How_much_does_it_cost_to_make_a_cell_phone
What they don't take into account is R&D, salaries, corporate profits. LG and Google need to pay all the employees who are involved in this device from the day it was proposed until whenever, probably more than a year down the road, that it hits its end of life. LG still plans to make a profit on the device itself. Why else do some devices sell unlocked for >$700 dollars. When it is said that Google is subsidizing the device they are talking about absorbing all those costs while not screwing over their hardware partner.
---------- Post added at 11:34 PM ---------- Previous post was at 11:31 PM ----------
GR36 said:
edit: I have just read the article posted and what a load of rubbish it is!
selling for $400 below what is usually expected of a high end android phone IS NOT subsidising the phone! Subsidising is selling for less than the cost to manufacture a distribute. The phone is self will cost c.$150 to manufacture (maybe less) plus 5-10% to distribute.
Click to expand...
Click to collapse
I'm not claiming credibility for the article, but it is one of many touting this rumor. I'm just pointing it out. And I do believe Google is subsidizing the device, though perhaps not to that extent. I don't expect they can take any more of a loss for black friday sales than they already taking on standard sales.
It's highly probably they're doing what Sony did with the PS3 - as far as I recall they didn't make a loss but they sold the units at close to zero profit to get Blu Ray into homes. That proved to be a clever move if you look at the demise of HDDVD.
Now I don't think even Google expect this to kill off the competition in that way, but flooding the market with low priced high end Android devices increases their market share, the price makes other manufacturers look bad and they make more money from the Play and other related revenue streams like accessories, other nexus devices etc.
At $300 for 8GB of storage and $350 for 16 GB of storage, the Nexus 4 is an incredible piece of technology for a very reasonable price. Compare this to the unlocked Galaxy S4 at $650 or the HTC One at $600, also available from Google Play. The hardware differences in the more expensive phones are:
- Super AMOLD LCD (vs. IPS LCD on Nexus 4)
- Polycarbonate body (vs. glass on Nexus 4)
- More built in storage (32 GB on S4, 16 GB on HTC One, although you can get a 16 GB N4 for $50 more)
- Better camera on the S4 (13 megapixels while HTC One and N4 have 8)
- MicroSD slot (no MicroSD slot on N4)
- Stereo speakers on the HTC One
- LTE 4G on S4
I don't see how the above list could explain nearly the nearly double price difference from the Nexus 4 to the S4 or the HTC One. Sure, the MicroSD slot, extra memory, and probably the polycarbonate certainly account for some of the price difference, but not double. I'm also skeptical that any custom software/skins on the S4 or HTC One would make up the difference.
Maybe Google is undercutting the others in its own store to drive customers to its own device. Or maybe Samsung and HTC purposely "enforce" a high retail price to work with carriers who offer subsidized phones with two year contracts. Do all S4 and HTC Ones come with radios for both GSM and CDMA? I can see the radios being an expensive piece of hardware, so maybe only including a GSM radio is helping to keep costs low.
I'm pretty sure that the production cost of these phones are quite similar. Probably around the $200 range.
So is Google taking a loss at selling the N4 at $299/$349? Probably not. They're probably not making much profit per device compared to Samsung or HTC though.
Is LG taking a loss by manufacturing the N4? Definitely not. LG has no reason to effectively give Google a phone to sell at a loss. They definitely have some sort of contract in place such that LG profits from this relationship. Besides, outside of Google Play, the price of the N4 is marked up.
How do we justify the cost of the Google edition S4 and HTC1 versus the N4?
Easy. The prices are simply marked up by Samsung and HTC. They happen to want more profit per device than the N4. So at the end of the day, is the S4 or HTC1 $300 better than the N4? Definitely not. It's just a matter of Samsung and HTC wanting more of your money.
HTC One is now $49 from AT&T with 2 year contracts.
lopri said:
HTC One is now $49 from AT&T with 2 year contracts.
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Click to collapse
That's a pretty solid deal for the One. However I don't believe it's Google's stock edition. That can only be found on the play store.
It's really do believe that they are selling it close to a loss, if not at a loss. There's just so much hardware there.
The thing you need to ask yourself is why. Why would Google sell such a great phone for SO cheap? Well, for one, it's not doing it solely for the profits like the other guys so the prices aren't insanely inflated. They do it to promote development on Android, to show what pure AOSP looks like (now the Google Edition phones also do this), and also to bring more end users into the Android environment. Make a high-end, affordable smartphone and more people will be willing to switch OS's. Plus, they don't spend millions upon millions promoting this phone like those other competitors do.
There are many reasons why it's cheaper and why Google continues to sell it. I just hope they continue with the Nexus line. Those new Google Edition phones have me worried about the future of the Nexus line. I hope it's not an indicator that they will stop making Nexii (?) in a few generations.
Economic Yourern
Johmama said:
They do it to promote development on Android, to show what pure AOSP looks like (now the Google Edition phones also do this), and also to bring more end users into the Android environment. Make a high-end, affordable smartphone and more people will be willing to switch OS's. Plus, they don't spend millions upon millions promoting this phone like those other competitors do.
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Agreed! This is what I was thinking about this morning as well. The price is compelling enough to even have iOS fan boys and developers to give it a try. And yeah, their advertising is much less. I probably wouldn't have heard of the Nexus 4 if one of my friends hadn't told me all about it. Google probably isn't taking a loss, but the margin can't be all that great either.
I'm just happy there is an affordable unlocked phone on the market with great hardware. I've never been a fan of the subsidized two-year contract. What other service locks you in for two years? With the affordable yet powerful Nexus 4 and T-Mobile (one of the "Big 4" carriers) doing away with contracts, the other carriers will be forced to adapt sooner or later.
Google doesn't need the money from selling Nexus devices. They can make it back from advertising.
Sent from my Nexus 4 using Tapatalk 2
In demand smart phones have historically garnered lots of money from subsidies. It is the main reason why they are a major cash cow for Samsung and Apple. Their other products have no where near the margins of an iPhone or S3/4. As long as people keep paying $100/month cell phone bills in order to get their next to free flagship phone every two years, I doubt this will change.
Kudos to folks like Google, T-Mobile, and a number of MVNO's that are trying to bring more fair pricing to consumers than the AT&T's and Verizon's of the world, but the reality is that most folks are still paying way too much for devices and service.
Solutions Etcetera said:
In demand smart phones have historically garnered lots of money from subsidies. It is the main reason why they are a major cash cow for Samsung and Apple. Their other products have no where near the margins of an iPhone or S3/4. As long as people keep paying $100/month cell phone bills in order to get their next to free flagship phone every two years, I doubt this will change.
Kudos to folks like Google, T-Mobile, and a number of MVNO's that are trying to bring more fair pricing to consumers than the AT&T's and Verizon's of the world, but the reality is that most folks are still paying way too much for devices and service.
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Is $100/month a genuine possibility or an exaggeration? Either way, the US carrier monopoly is extremely messed up. Over here in the UK you won't find very many carrier exclusive/branded phones at all, and the same goes for most other parts of the world. I feel sorry for anyone who has to carry around a device with a Verizon, AT&T or Sprint logo placed anywhere on their devices. The entire idea of it just seems stupid to me.
Nigeldg said:
Is $100/month a genuine possibility or an exaggeration?
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Heh heh... it is not an exaggeration. Most EU member agencies are far more consumer oriented than the US, who pretty much just lets capitalism reign supreme. The FCC is a joke when it comes to Cable and Cell providers (my cable/internet bill is $160/month... I watch three channels, ESPN, ESPN2, and GOLF from their lineup that I can't get OTA, but to have HD I have to sign for a hundred+ channel package).
Solutions Etcetera said:
Heh heh... it is not an exaggeration. Most EU member agencies are far more consumer oriented than the US, who pretty much just lets capitalism reign supreme. The FCC is a joke when it comes to Cable and Cell providers (my cable/internet bill is $160/month... I watch three channels, ESPN, ESPN2, and GOLF from their lineup that I can't get OTA, but to have HD I have to sign for a hundred+ channel package).
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Wow, $100/month for a phone comes out to twice what it would here in the UK. My dad got a GS3 when it was new for free on a £35/month ($50/month) contract, and even that's a bad deal to me. I'm currently paying £10/month ($15) for 250 mins, unlimited texts and 1GB of data which is pretty damn good compared to what you can get in the US. I'd assume the $100/month contracts at least have unlimited everything right?
Oh and OP sorry for the off-topic
Nigeldg said:
I'd assume the $100/month contracts at least have unlimited everything right?
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Minutes yes, data no (unless you have one of the coveted grandfathered data plans from before the point where the big three decided unlimited was a bad idea). Now a days, "unlimited" data plans mean vague "fair use" policies and throttling once you hit their cap. Sure you have "unlimited" data, but what use is it when they throttle it down to 3G or even 2G once you reach a given point.