The Nexus 4 was announced to much fanfare last week, especially when the prices hit. $299 for 8GB? That’s less than half what a high end smartphone will cost you off contract nowadays. Buying from the Play Store at these prices is a no-brainer for many of us.
After the dust settled, we started to get more information about the pricing and availability of the Nexus 4 outside of the Play Store. Here in the states, your only option to pick up the device with a carrier attachment is on T-Mobile. As we’ve learned since the announcement, T-Mobile will be charging $199 (after $50 mail-in rebate) on a Classic Plan with a 2-year commitment for the 16GB Nexus 4.
Now some quick math will make you realize that this may not be the best deal in the world. At $199, you’re signing a 2-year contract to save $150 off of what Google is charging directly. As we’ve highlighted several times before on the site, there are a multitude of reasons to consider buying a device full price and choosing a cheaper plan without a subsidy. T-Mobile itself even offers Value Plans, which are in every way identical to Classic Plans but are cheaper every month because they offer no device subsidy -- not to mention the multitude of Prepaid options it offers.
So why do I think it’s a good idea that T-Mobile is offering the Nexus 4 on contract for an inflated price? There are actually a few good reasons.
First, it’s important for Google to have some kind of retail presence in the U.S. market. Outside of Best Buy selling the unlocked Nexus S, Google hasn’t had a great track record of offering Nexus devices in stores. The Verizon Galaxy Nexus was another try, and we all saw how that worked out. At this point in time, T-Mobile is likely the only carrier that Google can convince to sell the Nexus 4 exactly as-is, with no extra bloatware or carrier restrictions. All indications at this point are that T-Mobile's Nexus 4 will be indistinguishable in hardware and software from Google's. It probably doesn't expect to sell many of these, but having presence in carrier stores across the country will increase awareness of the Nexus brand name.
Not only is it important to have physical store presence for brand awareness reasons, but also because customers today like to physically touch devices before they purchase them. Sure consumers purchase things online, but they still shop in physical stores to see the items first. From an educated consumer standpoint, being able to play with a device in store is important to build confidence in the device. Google's pricing structure is good great, but it might not be good enough to get people to buy a device sight-unseen.
Lastly, $199 on-contract may actually be a good deal for some users in specific cases. Many people out there are part of a family plan. And while it may be a great idea to move to a Value Plan or Prepaid option for many individuals out there, it’s not so easy to move a whole family all at once. For the Android (and Nexus) enthusiast out there tied into a Family Plan, having that $199 option available is a great way to save $150 that they shouldn’t have to spend. The upgrade is there, might as well use it.
Don’t get me wrong, nearly everyone that is considering the Nexus 4 should be buying it from the Google Play Store. But not everyone -- nearly everyone. For those few people that it makes sense to buy the phone on contract, they deserve to get the same great Nexus experience that the Play Store purchasers get. Everyone else buying from the Play Store now has a physical storefront to try the device before they buy as well. The general consumer who has never heard of a Nexus before now has a way to discover it.
Google has an opportunity by partnering with T-Mobile to expose the Nexus line to the general public and offer a compelling on-contract option to specific customers, all while keeping alive its vision of what a Nexus should be.
