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Phone House suspends Nexus 4 plans after learning LG will be selling the device at a much higher price than Google

Sadly, we're not overly surprised by this news, but it still disappoints us nevertheless. Spanish retailer Phone House -- Spain's answer to the UK's Carphone Warehouse -- has announced via its Facebook page that they're suspending all plans to sell the new LG Nexus 4. The reason? LG is reportedly going to be selling the device to retailers at a much higher price than Google will be offering direct from the Play Store. The statement reads like this -- albeit a slightly shaky translated version:

Madrid, November 2, 2012

Phone House, the largest independent chain of telecommunications in Europe and Spain, it will release the new Google Nexus 4 and LG, whose launch was scheduled for November 13 in the catalog of this month

Phone House has decided to suspend the sale of this product after finding that the recommended retail price by LG of 599 € and conditions offered for commercialization are worse than the MSRP published by Google on its website and does not maintain the commitment with customers and offer the lowest price guarantee that characterizes Phone House.

Spain is lucky enough to be one of the few nations worldwide that can purchase devices directly from the Google Play Store, so at least eager Spanish Nexus fans won't be left completely out in the cold. From Google, the Nexus 4 will be sold for €299/€349 for the 8GB and 16GB versions respectively. Phone House claims that LG want to sell the devices to them with a recommended retail price of €599. Yowzas. Without saying which version that price relates to, it equates to a minimum increase of €250 over the Google prices. 

According to The Next Web, the same situation is presenting itself in other European countries such as Italy and Austria. However, unlike Spain, neither of these two nations are supported for device purchases from Google Play at this time. Angry potential customers have been taking to the LG Mobile Facebook page to voice their opinions. But, without a way to purchase at the lower price from Google, it seems at the moment as they are in a tough place if these prices turn out to be correct. 

Over in the UK however, Phone House's counterpart, Carphone Warehouse, is still offering pre-orders for the Nexus 4. These are only on contract at this time with a varying price structure, but at this moment the retailer is not offering a SIM free price option for the Nexus 4. If you want to wade in on this, be sure to head on into the LG Nexus 4 Forums and share your thoughts with us. 

Source: The Next Web

 

Reader comments

Spanish retailer suspends plans to sell LG Nexus 4 on grounds of pricing

29 Comments

Really it's Google fault. The $599 is normal fora smart phone of this caliber even if it doesn't have lte. Lg and Google probaly have a deal that other retailers can't mang match.

I don't think it's Google's fault for trying to provide a cheap phone with great specs, the fact that Android phones were starting to get up in the iPhone area was beginning to be pretty sad, frankly the iPhone profit margins are pretty damn disgusting.

But i guess the issue is that LG won't sell the Nexus 4 to retailers cheaply enough that they can compete with the $350/350€ prices, i also suspect this is why the off-contract option for CPH disappeared, since only the contract one makes financial sense.

Too bad, it could've sparked a new war in prices, but i guess it'll just go back to being iPhone being the most expensive and Android/WP8 alternatives slowly increasing in price for each new generation.

You guys don't get it. It is not LG!

LG is the manufacturer. LG gets the same price no matter who sells it. LG gets the same price no matter how much it gets sold for. LG probably gets in the area of $250 per phone (estimate).

The MSRP is nothing but a SUGGESTED price (Manufacturers SUGGESTED Retail Price). How much the retailer sells it for, is up to the retailer. The retail price has nothing to do with LG.

Google is selling this thing with no or virtually no retail mark-up. That is why it is cheaper at the play store.

The people you need to be angry at, are the ones who have discouraged Google from doing business in your country. It's called your government. That's why you will pay more in your country. LG is probably more bummed out than you. LG would make a lot more money if Google could sell it in your country because many more people would buy it in your country.

It's not google. It's not LG. It's your government.

"Angry potential customers have been taking to the LG Mobile Facebook page to voice their opinions."

So people are angry and want to buy it for a higher price from the cellular providers? What the...

Even if they discounted the phone with a 2/3 year term it's probably going to be just under the price of a buying it outright from Google, which is the best way to do it because then you know for sure the updates are coming directly from Google.

Someone should tell T-Mobile to do the same thing! It will cost a lot more from them than google play store!

And its only available on contract in the USA on the smallest carrier of the top 4. I guess they are really gunning for people who aren't, and won't be in an LTE market any time soon.

And this is why people don't like this company. Every business is out to make profits sure, but LG is just so blatant and ruthless about it.
If it wasn't for this being a "Google" device this phone would be forgotten about (by LG) in a matter of months. Just look at every other phone they've released in the last 2-3yrs, instead of official updates, they encourage you to visit the xda community to find your software...

Google has really upset the apple cart (actually no pun intended, if you can believe it) with their nexus program of late. From the very beginning this program was aimed at providing VALUE to the customer. Which is a genuinely bizarre approach today in the mobile electronics industry.

When google saw Amazon's model for the new kindles they realized exactly how to do it. Amazon set out to make money in being a "content" retailer, the kindle was simply the portal. They were willing to make nothing (or next to nothing) on the device itself so that they could sell movies, books, games...which they would make money on.

Google of course makes it's money in search and advertising. But is certaily rapidly expanding into the content area too.

The android operating system was from the beginning meant to be a way get more eyeballs on googles search results. The problem in the US with the mobile electronics field was the wireless carriers were still gouging away at the customers, as is the norm in an industry that is almost completely controlled by government (see medicine, finance, and higher education for other examples). Not only were the carriers our wireless service providers, but they are the de facto RETAILERS too. And the carriers have become an expensive obstacle between the companies that want to advertise on google, and the consumers eyeballs. Smartly, google is fighting back, by making sure that consumers can still get value in the mobile electronics industry, where google's prominence will dwarf what it was on the PC.

The Nexus 7 was the direct response to the kindle. The Nexus 4 is taking that same idea into the phone form factor. Google has removed the gouging retailers out of the equation with the nexus 4, and instead is doing direct to consumer sales for no profit. That's why it is not available on att, verizon, sprint (and T-mobile just looks silly with the $199+ 2 year contract).

In a global market place, Phone House(or any other straight-up retailers) in Europe can't compete on price with "direct from google" either. They can claim that it is LG's fault because the MSRP is too high. MSRP is the "manufacturers SUGGESTED retail price". Typically MSRP in consumer electronics includes about a 100% mark up for retailer. Phone House could match google's direct to customer price... they just have to forget about their retail mark-up (and make no money). And who is going to buy anything else that they sell when the nexus 4 would be such a value? It would be the only thing anybody buys from them. I don't blame them for flipping the bird to google. Phone House is kind of an innocent bystander in the cross-fire between google and the carriers in the US.

But in the end. Google, its advertisers, and consumers world wide are the big winners in this story. Retailers and carriers are the losers. This is a disruptive product... a very serious game changer in the industry (you can see exactly how disruptive this is by the carrier's and retailer's response to this product).

While I agree with your post, I don't think Google saw what Amazon did and then tried to replicate it. It think their intent was for the Nexus program to actually be the vehicle for the Play ecosystem all along.

They just had to build the Play ecosystem out, first.

Could be. But if that was the plan all along... they sure mucked things up with marketing the Nexus devices for the last couple of years. I guess stranger mistakes have been made. They were also curiously slow in developing and rolling out the play system so late after the development of android itself.

I really think the nexus program really was originally a just developer's tool, not one really for mass consumer appeal. Later on, google saw a model (amazon's kindle model) that killed a half-dozen crows with one stone. If this was always the plan, then their past marketing just doesn't make much sense to me.

Maybe it was the plan at first... the plan got changed... and got changed back to the original... :)

Most companies can't afford to sell their product for a loss, or barely any profit. Google has the advantage of most of their income being other sources.

Only consumers in A FEW countries are winners (where Google Play store sells hardware). What about the others? They will surely have to pay much extra for this phone, being forced to buy from retailers. If Google really wants the consumers to be winners they should open their store for more countries.

Google would choose to open their store in every country in the world, if they could. It's not that google is refusing to make money, that's absurd. Are you serious?

The reason google can't set-up shop everywhere, are a couple little things call government, greed, and protectionism.

So is in my country, in indonesia, an lg spokeperson has just confirmed that they will sell the nexus 4 above 500 bucks, i think lg is scared that the nexus 4 will canibalize the 4x hd and optimus vu...

SHAME ON YOU LG ! SHAME ON YOU !

google why did you choose lg over sony or motorola ? lg sucks, it used to be a washing machine / home appliances brand

for those whose native country doesn't have a google play store, don't expect it to be under 400 bucks,

No Carrier can match Google's price. Carrier's are in it to make money. And it's true that just about anywhere but the Play Store the N4 would sell for 500 to 550 range. And probably more beacuse it's Unlocked. Which is the range for any Flagship Device without contract. Google needs to work on getting the Play Store into more country's and markets.

So people are upset with LG because they're not willing to sell the phone at a loss, something Google appears to be doing? Looking at other phones on the Phone House site they are currently advertising the Samsung Galaxy SIII for 519€ and the Note II for 589€, maybe they should also complain at Samsung are not selling their phones for 349€.

Was in Carphone Warehouse today and was talking to onw of the members of staff and just asked about the Nexus 4 he gave me all the contract prices and I asked sim free and they said £380 for the 8GB

Why doesn't Google straighten out their Play Store so these countries can buy directly from the Play Store. Sounds like a very easy fix if Google wants to put these phones into their loyal customer's hands. The price is absolutely a major plus for any true phone Geek and anyone looking for a great deal. I would pay an additional 100 bucks if I could get 32 or 64gb of int storage. That is my only complaint, LTE isn't a big deal, I get fantastic HSPA+ speeds and to tell you the truth I prefer it.

The Play Store only works in a FEW countries in the entire world.

That's simply impossible for most people to do. If you live in the US or in the four countries in Europe that actually can, good for you.

If you can't, you may never get the Nexus 4 unless someone buys it for you and mails it to you.

This is both Google and LG's issue. They cannot expect GSM carriers to compete against Google's retail pricing if LG branded retail is going to be higher. Google should expect a greater push by Phone House on other Android or worse other OS based devices like iOS or WP8.

First off this phone is a lower end device compared to the Galaxy Nexus last year to save on cost but they are charging more, so where is the savings LG?