Google on the Nexus 6 pricing: people want $199 flagships, this will sell

Google raised a lot of eyebrows when Motorola announced the Nexus 6 partnership handset, as it strays away from the typical Nexus tradition not only by being a no-compromise giant phablet, but also with the decision to out it at full price, like each and every other flagship out there, instead of subsidizing it to an extent.

This is a veritable U-turn in Google's strategy - the Nexus 6, as all other flagship phones, is selling for $649 unlocked, and the usual subsidized price with a two-year contract, but this time on all five major carriers in the US. "We are selling the Nexus 6 in a way most people are used to buying it," said Hiroshi Lockheimer, VP of Android engineering at Google.

The logic behind Google's decision is that research showed a predominant interest in a decked-out smartphone, whose higher pricing would be offset with carrier subsidies, as is the usual business model in the US. Nexus fans understood the power of a stock Android device that sells for $350 unlocked, but the rest of users, and these are the vast majority, only saw that the device costs much higher than the usual $199 they are accustomed to paying for a high-flying smartphone on a contract.

Here is why Google decided to go with the beaten path when it came to the Nexus 6, and release a no-holds-barred device, pricing it accordingly. According to Sandeep Waraich, a product manager for the Nexus 6: "It was a deliberate decision to push the boundaries on technology. We first arrived at the solution, then the price." There you have it. Actually, Google's folks think that this way the Nexus 6 might sell more than the previous editions, as it will have much more visibility in carrier stories, and availability from the manufacturer, for whom this will be hero device, earning respectable margins. We'll see if that credo pans out when the first sales numbers start to trickle in.

source: CNET

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46 Comments

1. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

AT&T Verizon T-Mobile Sprint are so happy to see nexus 6 priced at $699

3. NexusPhan

Posts: 632; Member since: Jul 11, 2013

Yes they are, except T-Mobile who doesn't make much money off their phones. Selling a brand new phone at $0 with subsidy automatically screams cheap to the average consumer. They have in their heads that phones cost $200 to make and don't realize there is any subsidy behind that numbers. So when the average consumer sees $0 on contract, they think they are literally giving phones away for free and not paying $400 for it (which they actually are). While I hate it, it's an unfortunately smart move by Google.

25. javed1973

Posts: 2; Member since: Oct 31, 2014

Phan, I understand what you're saying. that subside is divided by 24 months and that is why you pay more with those companies. But, with companies like T-mobile. You have to pay the full amount for your phone. divide that amount by 24 months and added to your bill and it comes out to the same. The difference is that you pay in advance. But, are out of that money. I am pretty sure a lot of people buy it using credit cards and the interest might be worst.

43. Techhog

Posts: 2; Member since: Nov 03, 2014

T-Mobile doesn't have subsidies or service contracts. It's a $0 down payment (if you have good credit) and the full price is paid over 24 months. Nearly all of T-Mobile's phones are available for $0 down, so it doesn't really have a negative impact.

2. sorcio46

Posts: 435; Member since: Jul 27, 2011

This only applies to US market, because here in Europe and in some other markets it will fail because 649€ off contract equals to 812,68$ that is way too much compared with the 349€ (437,02$) of the Nexus 5.

4. NexusPhan

Posts: 632; Member since: Jul 11, 2013

Motorola is biggest in the US. No surprise here. I'd expect to see somewhat quick discounts overseas.

5. DogeShibe

Posts: 1121; Member since: Jan 10, 2014

Actually it's vice versa. People in Europe and asia don't have to deal with carrier exclusives. They always get their phones unlocked... so they are more used to it. But this nexus is still very expensive just like you said.

9. Phonedingo

Posts: 399; Member since: Aug 16, 2014

As long as it's cheaper than the six plus, then the price is reasonable.

29. OldNorseBruin

Posts: 235; Member since: Mar 12, 2013

Not only is the NEXUS 6 cheaper in Price than the iCHUMP6+, but it also destroys the iCHUMP6+ in every Spec Category...

10. TylerGrunter

Posts: 1544; Member since: Feb 16, 2012

Fully on target. In Europe the old model is better as the subsidies have been much lower here and in many countries they are dissapearing. This phone seems to be for US and US only, but the rest of the world will have to suffer the decission. And many Nexus fans are already dissapointed and buying something else (I know at least one that went for the LG G3 instead).

17. ihavenoname

Posts: 1693; Member since: Aug 18, 2013

Nexus 5 (2015) would be so cool. Updated camera and speaker, bit larger battery, more durable display and a SD801 w/ 2GB of RAM (enough for "budget" phone), and an affordable price. I'd consider it.

18. black02wing

Posts: 34; Member since: Feb 05, 2007

649.00 us converts to 519. € is that better?

21. techspace

Posts: 1037; Member since: Sep 03, 2012

Actually, it's $649 before taxes.

35. baldilocks

Posts: 1508; Member since: Dec 14, 2008

No tax in my State. :)

40. techspace

Posts: 1037; Member since: Sep 03, 2012

Where do you live?

6. shuaibhere

Posts: 1986; Member since: Jul 07, 2012

So what about countries where there are no contract price.... Nexus 5 is doing well in india because they priced it reasonably.... Now this will be priced neck and neck with note 4...only pure stock fans will buy it...

7. ProblemSolver15

Posts: 372; Member since: Jun 14, 2010

Just release it in the stores already.

32. Professor

Posts: 223; Member since: Aug 02, 2013

They can't start selling them at the stores yet... After Motorola send the phones to them they have to add all their useless bloatware before they can send the phones to the stores!!!

8. realjjj

Posts: 375; Member since: Jan 28, 2014

It's not enouhg that they sell out ,they need to keep bragging about it. Google is more and more dissapointing with every moronic statement.

11. Andrew5190

Posts: 55; Member since: Oct 23, 2014

What's moronic about this? Every manufacture and OEM brags on their flagship like it's the greatest thing since sliced bread. Why is it that when Google joins the fray, it's moronic, whereas when Apple does it, it's business as usual?

12. jan25

Posts: 470; Member since: Feb 26, 2012

Google never releases their sale figures for Nexus devices, no reason to believe they would for this Nexus. IMHO, Google is trying to have a commercially successful flagship stock Android device without upsetting the Android OEMs too much. They are trying to prove to OEMs that people would actually pay a high price just to get Google's Android experience. It goes in line with their Motorola strategy (Stock Android, minimal but useful features), which worked pretty well.

14. Awalker

Posts: 1977; Member since: Aug 15, 2013

We have no idea how Motorola's strategy is working out. Like Google they don't release numbers.

13. Awalker

Posts: 1977; Member since: Aug 15, 2013

Without a massive marketing effort this phone is not going to sell well. Most people don't know what a Nexus phone is and it's going up against established players like Apple and Samsung. I can't imagine consumers picking this phone over the iPhone 6+ and the Note 4.

15. marcellus7

Posts: 7; Member since: Oct 15, 2014

Is this article about the Fire Phone XL ???

16. skymitch89

Posts: 1452; Member since: Nov 05, 2010

Google must not know too much. Yes, people want $199 flagships, but they want $199 off contract pricing for flagships; or at least below $400 flagships, and they should be available at most all carriers.

20. TheYellowDart

Posts: 26; Member since: Oct 18, 2013

Google knows exactly what it's doing. People mainly buy phones on contract in the US and by 199 is the standard pricing for a flagship. IPhone 6, galaxy s5, HTC one m8, all debut at that price and iPhones of course I've sold a 500 dollar on contract price 6 plus 128 gb. There's techies that was the best for their money and do their research and those people don't make anybody any money. It's the masses that don't do much research, get what their friends having, like what they see in a commercial, and most importantly look at the price as part of the perceived value of the device. Some folks don't want the LG g3 over the s5 because it's cheaper, and that makes them think it's a lesser phone. It's only when I can educate them about the specifications that they'll understand the real value of the phones.

19. marcellus7

Posts: 7; Member since: Oct 15, 2014

Of course they do this right as the carriers are switching from their full subsidy to financing phones

22. cripton805

Posts: 1485; Member since: Mar 18, 2012

Please tell me how the Nexus 4 and Nexus 5 were always sold out... Yet, google says they want a flagship? What about the Moto and Lumia 520?

23. tkk76

Posts: 19; Member since: Oct 03, 2014

I hope some other manufacturer with a strong US presence steps up to fill this void. Something like the One Plus One in terms of price and specs, but widely available the way the Nexus 4 and 5 were.

24. Pattyface

Posts: 1658; Member since: Aug 20, 2014

..... Still waiting on carrier release dates since Google can't get their production issues fixed. They did this with the 4 and 5 too..

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