A $300 Nexus Phone Still Won’t Sell In The US, No Matter How Good It Is

Sometimes, I enjoy playing devil’s advocate to an unpopular position. Scratch, a lot of the time, I enjoy playing devil’s advocate to an unpopular position.

And I’m here, once again, to play devil’s advocate to the wow-it’s-almost-too-good-to-be-true $300 Nexus phone.

Now, a lot of you who read Android Police don’t like this phone, but most of you, frankly, don’t like it for all the wrong reasons. A missing microSD slot and a lack of LTE support are two things the average consumer really doesn’t care about. Or, to be blunt, have a clue even fucking exist as things. These are just nonsense acronyms geeky people throw around on the internet, as far as “regular people” are concerned.

And then some of the more… reasoning-challenged of you choose not to like it because it’s an LG. Which, OK, whatever – you just keep on buying that Toyota every 5 years because American cars are “crap” and you know best because you had Dodge in the early 90’s and made a promise to yourself to never buy Detroit again because they could never possible get better. Bulletproof logic.

Anyway, regular people buy most of the smartphones in this country today. And regular people who buy smartphones generally choose to be on phone contracts here in the US. The reason is simple: to save money up front. For $200, you get an iPhone 5, which really is a $600+ phone – if you were to buy it unlocked. And it’s not until month 12 of the contract and the new iPhone announcement that these people start mewling about the atrocity that is the carrier upgrade cycle. Then, when the next new iPhone comes around after that, they promptly forget and renew their subscriber agreements, because that’s how America kind of works. I’m going to forego a sheep joke here, because I’m not 12.

The sad reality is that in a society that has built a consumer economy on personal credit, monthly payments, and the save-money-now-and-don’t-think-about-it-later mentality, unlocked phones don’t make sense. This behavior is so deeply ingrained into the average American’s brain and daily life that it’d be laughable to think Google could suddenly change the way people think about cell phone service. At least not without starting their own carrier, but that’s neither here nor there.

The point is this: when someone starts shopping for a smartphone, they’ll probably see the Nexus 4 at some point thanks to Google’s massive online ad campaign, and they’ll end up at the Play Store. Fact aside they’ll probably be realizing for the first time that Google even has a store, they will look at the price tag of $300, and promptly close the window. They don’t care about the lack of a  contract, or what it does, or how quickly it gets software updates. They see $300, they leave.

Then, they go to the AT&T / Sprint / Verizon website, see an iPhone 5 or a Galaxy S III for $200 (or, as with the GS3 in some places, less), and they buy that. Or, like so many Americans, they buy the shitbox free Android phone that will last them 6 months before falling apart like a French car built in the 80’s, and walk out shackled to a two-year contract that will give them nothing but misery. That, or they get an iPhone 4 / 4S.

And prepaid customers? Good luck convincing the average StraightTalk subscriber that dropping $300 on a smartphone is something they want to do.

It’s pretty frustrating.

But that’s the way the market is right now. Until some disruptive force comes along in wireless in the US, people will keep buying contract phones, and the big carriers will keep selling them. It doesn’t matter that the Nexus 4 won’t work on Verizon or Sprint – because even if it did, people still wouldn’t buy it. The Nexus 4 could be an SD-card and LTE-packing phone endorsed by Honey Boo Boo and most people still wouldn’t give a shit – the carriers really do own this town.

Hell, the Nexus 4’s theme song should be “I Fought The Law.”

Tablets, on the other hand, I’m much more optimistic about. I think Google can make the sale to ordinary people, because so few of them care about a mobile data-connected tablet (meaning no carrier interference), and I think that if the app ecosystem grows quickly enough, they can actually get the ball rolling in a big way. A $200-250 price tag on the Nexus 7 this Christmas may just be a turning point for Android slates [that aren’t Kindle Fires]. And Google knows that if it can get people on the hook with one “Nexus” product, those people will get curious about other Nexus products.

And that really is the strategy here: build a hardware ecosystem that creates brand recognition and, hopefully, customer loyalty. Sort of like… Apple.

Let’s hope it works.

3 thoughts on “A $300 Nexus Phone Still Won’t Sell In The US, No Matter How Good It Is

  1. Scott Oldfield (@scuttlefield)

    So, I’m curious about how you think the Nexus will sell directly through T-Mobile. Given the fact that you can get it for $200 on contract, it should sell reasonable well on T-Mobile right? I’m not saying that that means it sells well overall since T-Mo is pretty small potatoes, but still should do decently. …or is $200 on contract still to much?

    Another point here…it seems clear that Google is not going for numbers here as it seems pretty certain that there will not be a CDMA version. They are still sticking to their guiding principals for the Nexus program first. Honestly, I don’t expect Google every having a top selling Nexus phone (unless the market drastically changes) or I would think that they loosened their principals (sold out?)

    1. rdr0b11 Post author

      I think it will sell alright – but the Galaxy S III and Note II will probably eclipse it by a huge margin, especially as they drop in price. For $100 on contract, the N4 might have been a little more interesting strategically for T-Mo. At $200, I don’t see it doing much. People have no idea what it even is.

      I don’t know about Google’s goal not being numbers. I think that’s what we’ve told ourselves about every Nexus phone, and this is the most consumer-oriented one yet. There’s even good reason to think it will actually move even fewer units than the Galaxy Nexus unless carrier variants emerge, which is a pretty sad thought. I think Google’s goal is for it to sell, I just don’t think they have the clout to make that happen, so they’re trying to disrupt the market, instead of playing ball with the carriers. And I just don’t think it’s going to work – at least for the Nexus 4. Now, will they keep hammering away with this strategy for the next few years? That’s possible, and maybe they’ll start making headway with prepaid GSM MVNO’s and break into the low end of the market. But right now, the Nexus phone seems likely to do what every one before it has: garner critical acclaim as the purest, most usable Android phone on the market, and then quietly fail to attract the interest of customers.

  2. Matt Simmons (@mattwsimmons)

    Remember also that its not the Manufacturer that decides its pricepoint unlike APPLE. The carrier pays full price for the equipment and decides how much of a cut to take and they get it back over your contract period. T-Mobile has more to do with it than Google does. If they have more profit to be made on a less expensive phone they won’t put that phone in that pricepoint until they see its not moving.


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