Google needs a cheap smartphone more than Apple ever did
It seems that the technology industry's monoliths simply won't offer "cheap" smartphones despite constant pressuring from anxious pundits and befuddled analysts.
Google is expected to stop selling its Nexus 4 smartphone, the flagship Nexus product the company co-built with LG, after its remaining inventory is depleted. The company previously reduced the cost of the device to just $199 without a contract, indicating that the probably-leaked Nexus 5 might be announced soon.
It's surprising that Google would decide to stop selling the Nexus 4 simply because it might be introducing a newer model -- especially given the price cut, which allowed Google to sell a device directly to consumers for the same price they would pay with a two-year contract from wireless carriers or other retailers.
Instead, it seems that it would have been wiser to keep the Nexus 4 and sell it either at the steeply-discounted rate or offer it for free. Google has the chance to do what Apple wouldn't with the iPhone 5c by releasing a cheap-but-good smartphone that appeals to prepaid customers and people who live in emerging markets.
Unlike Apple, which prioritizes profits over marketshare, the Android platform has been built atop cheap devices. Android hasn't come to represent 79.3 percent of the smartphone market, according to research firm IDC, by powering costly, high-end devices -- it got there because manufacturers are allowed to pre-install it on damned near any device imaginable.
Offering a free-or-cheap Nexus 4 could also allow Google to retake control of the Android market. Samsung currently represents some 39.1 percent of Android smartphone shipment, according to IDC, and is reportedly reaping 95 percent of the segment's profits, too. Google is reportedly -- and rightly -- uneasy with Samsung's lead in the Android market, and it's surprising that the company doesn't intend to keep the Nexus 4 around in an attempt to snatch some of that control back from its greatest frenemy.
And then there's Xiaomi, the so-called "Apple of China" that offers cheap, incredibly popular Android-powered smartphones and television sets in China. The company intends to expand internationally in the coming years, and has hired ex-Google executive Hugo Barra to bolster its attempts to do so. Again, a cheap device could help Google keep Xiaomi from asserting control over too large a portion of the Android market.
Pundits have been berating Apple for its failure to announce a "cheap" iPhone since the iPhone 5c was first announced last week. Union Square Ventures' Fred Wilson writes that the "C" in iPhone 5c must stand for "clueless." If Google doesn't sell the next Nexus smartphone at the same price or cheaper than the $199 Nexus 4, perhaps it should go ahead and call that device the "Nexus 5c."
[Illustration by Hallie Bateman for Pandodaily]