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Nexus 4: because the price will be highest for € 349? To clarify

Nexus 4: because the price will be highest for € 349?  To clarify

Nexus 4, the new smartphone from Google in collaboration with LG: we have seen far and wide with our photo gallery and video preview. It seems therefore need now, as we had announced on Facebook, to a focus on the much-discussed price.

Since when have leaked the first rumors about the price of the Nexus 4 on the web and unleashed a real storm, we covertly documented in two articles (Phonehouse refuses to sell, open online petition against LG). Just to summarize a second, the problem arose from the moment Google has officially announced the 16GB version on Google Play Devices a price of 349 euro, while the retail market it seems that the device will not be available for less than 549/599 €.

Leaving aside the fact that the open market prices are not yet official, there arises a question: what is the right price for this smartphone? Find the right price for a product is never easy, and depends not only on costs that are incurred for the implementation, but also by a number of factors such as the market in which it is inserted, the existing product portfolio, etc. ..

Who then is right? Google offers the Nexus 4 to $ 349 / € or LG that will enter the retail market to 549/599 €? The answer more correct to say and both – and before I jump in the neck let's see why.

LG Electronics and Google are two companies in completely different way of doing business, one producing and selling hardware and lives with margins derived therefrom, the second develops services and lives with margins derived from it.

If LG were then put on the market a product so powerful (remember that all features that go beyond the current top of the range that cost over € 600) overnight might only sell Nexus 4, margins very low or no with the obligation of having to devalue the entire portfolio to try to do inventory of the remaining products. Selling the Nexus 4 to € 349 means selling at cost (or almost hypothesis), and thus lose profits significantly, a situation that a company already in trouble as LG can not deal with.

Why Google then sells it to a few hundred euro less? Google's goal and what to have in the hands of more people can be an Android device, so as to significantly increase purchases in Google Play Store. Ie is making an investment in buying large quantities of Nexus 4 that resell underpriced on Google Play Devices with the aim of encouraging the introduction of credit cards in the account and thus stimulate purchases of applications, books, music … In simple words even more contributes with users to pay the Nexus 4 to have a return later.

If, therefore, in Italy, as in all countries where the Nexus 4 will come only in the shop, you will be able to buy the Nexus 4 only at full price, this is Google's fault that he does not want to invest in those countries where the Play Devices not still active.

LG and a saint then? No, of course, is a company that has made several mistakes in the management of Android products and how ALL of society only thinks of making profits – but not very honest and they stop at all the blame for the affair Nexus 4.

Many of you but will ask anyway: why ASUS has managed to keep the price in line with Google Play Devices and LG is not it? Never mind, not least, we're talking about different markets where the consumer perceives in a Tablet a utility less than a smartphone, resulting in lower prices in general, the answer is very simple and focuses on the motivations behind the price decided by LG: Specifications. The Nexus 7 we find an nVidia Tegra 3 processor against a Qualcomm S4 Snadragon Pro (which costs much more), 1GB of RAM at 2GB, a 7-inch display against a very poorly defined, 4.7-like retina, we do not find the camera back against a 8-megapixel sensor with Sony, we do not find the connectivity HSPA up to 42.2Mbps downloads and do not find in the exceptional materials which the Nexus 4 and realized.

Here, then, revealed the secret: LG Nexus 4 and a normal smartphone as all other top of the range that the base will be sold at a price between 400 and 600 euro (do not know the exact figure yet), but thanks to the investment Google some countries can take advantage of the "discount" by paying less. The only thing that therefore we can only hope that Google and soon in Italy opens its store of devices so that we could pay almost half. (We point out that the Forum Google is already on the discussion on this)

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