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Nexus 4 shortages are Google's fault, says LG

nexus 4

By Stewart Mitchell

Posted on 18 Jan 2013 at 11:15

Google underestimated the demand for its Nexus 4 handset, according to an executive at LG, which manufactures the devices.

The handset sold out shortly after going on sale in several European countries, prompting speculation that Google was trying to create a buzz around the phone, but LG said Google had simply underestimated demand.

"Google had forecasts calculated according to their previous sales history of Nexus," said Cathy Robin, manager of LG's mobile division in France told business publication Challenges. "But they were much less in demand than the Nexus 4."

"Current deliveries from LG to Google correspond to what had been pre-ordered on Google Play. We continue to deliver regularly, but it's a just-in-time production," she said.

According to Robin, Google allocated ten times more phones to the UK and Germany than France, but the handsets still sold out and demand continues to outstrip production, with an increase in production taking six weeks to work through the system.

LG said production had been ramped up and that despite plans for a LG's next flagship handset – the Optimus G Pro – it expected to supply enough Nexus 4s to meet demand by mid February.

"LG has denied reports that it's going to stop production - the Nexus 4 will not stop," Robin said. "On the contrary, supply will increase. From mid-February, there won't be this pressure on the market.”

Profit margin

The price-to-hardware ratio of the handsets has led some commentators to speculate that the phone was being sold for a loss in a bid to bolster Google's position in the mobile device sector, but LG said that although the price was competitive it was still making money.

"We have no interest in selling at a loss," said Robin. "However, there was an agreement between Google and LG to sell it at a very attractive price - a super attractive price."

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User comments

bait and switch

illegal in most markets, Google seems to be content to run a classic 'bait & switch' sales strategy - advertise at a very attractive price but only made available at much steeper contract prices. Shameful.

By martindaler on 18 Jan 2013

change the record

Google have released a quality smartphone for a resonable price. It is perfectly understandable that they should base projected demand on the previous version. The contract prices have seen are beat that of any similar phone on the market. Some people were born to degrade and tread on everything positive that comes, unfortunately there are too many of these people registered on PC Pro

By eliot94 on 18 Jan 2013

"...too many of these people..."

ad hominem attack generally a sign of a weak argument

By martindaler on 18 Jan 2013

bait and switch or unfair pricing?

It's great to have cheap phones, but if google can subsidise handsets to secure monopoly position that is not good for the market.

By longn on 19 Jan 2013

Who is doing the conning?

It does not show that Google is subsidizing their phone any more than other manufacturers.
It more likely shows how much of an overpriced product the others are selling. As Google are not known for selling at a loss it is not good business sense.

By curiousclive on 20 Jan 2013

Subsidies

You will find that virtually all the phones are subsidised to some extent. The mobile operators gaurentee a price base on bulk orders, then sell heavily subsidised at their stores because the real money is made on the contracts. Google are ensuring customers pays a much better real price than the store obscured subsidised price. How can a phone cost £600 when the contract price is also equivalent to this? Either phones are outrageously overpriced or very heavily subsidised. Actually it is a bit of both. It is only Google which is doing anything about this pricing and is showing consumers they do not have to pay so much. This is the only reason Apple have been forced to bring out a cheaper version of ridiculously priced tablet and is showing up the pricing for windows tablets.

By Manuel on 21 Jan 2013

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