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Why LG Is The WORST Nexus Partner EVER

Eric McBride
37

I am so very very glad that the awesomeness of my Galaxy Note 2 has kept me from wanting the LG Nexus 4. Now don’t get me wrong...the LG Nexus 4 is certainly one hell of a hardware powerhouse, and at $299, you won’t get a better Android phone at that price point. But LG has..how do I put this nicely...There’s actually no other way to do so, so I'll word it but bluntly: they might have just f**ked it all up for themselves,  for Google's hopes for the new Nexus lineup, and most importantly, for lots of consumers that actually planned to buy the phone. 

Several EU countries have apparently ditched their plans of selling the Nexus 4 due to reports that LG later plans to sell the phone at a much higher price than Google does. Reports coming in from Italy, Austria, and Denmark are indicating that LG plans to sell the phone for 600 Euros, which is around $768. A Spanish retailer has already announced that they have dropped their plans to sell the device, and Phone House has also suspended its plans after learning of LGs plans. Phone House went on to state that the jacked up price made it impossible to honor their low price guarantee to customers, which makes a lot of sense when you think about how much cheaper Google is directly selling the same device for. 

Customers in Italy have taken to LG’s Facebook plans to protest the pricing, and I can certainly understand why. What the hell is going on in LG’s sales department? LG brings out an amazing phone at an amazing price point, along with a chance of gaining some consumer confidence back, and then what do they do? They pull this ridiculously dumb stunt.

What's the logic behind this move? What are they hoping it will accomplish? Is there actually ANY way that this makes sense? Taking advantage of customers that can't use Google Play to order the Nexus 4 by forcing them to order it at damn near DOUBLE the price? Pretty freakin low/dirty/stupid LG. 

LG has failed to issue any statement on the issue up to now, and considering how many companies are reporting this information, it would appear that it’s accurate (PhoneArena isn't reporting it as any type of a rumor, and I find the reports too consistent to be a rumor). I had my reservations about an LG Nexus device from the beginning, but now I am more than sure that Google is probably facepalming themselves for going with this OEM.

If LG wants to sell the Optimus G, which is pretty much their skinned version of the Nexus 4, for more money, then so be it. But how stupid do you have to be to blow this chance with Google and with consumers?

Some might argue that phones with this type of hardware normally sell at the 500 and 600 dollar price point, but that’s not what Google is trying to do here.They are trying to reform the Nexus brand, and all this action does is slap them in the face. LGs stunt not only hurts the Nexus brand, it makes Google, and Android, look pretty damn stupid (and pretty unorganized) if you ask me. It's also really messed up for consumers living in countries that can't buy the device from Google Play. 

Unbefreakinlievable.

I sincerely hope that this is all just one big misunderstanding (which I would natrually apologize for if it is), but something in my gut tells me that it’s not. I really hope that LG stops taking whatever drugs they’re on, and that they right this wrong before it gets completely out of hand. I also hope that Google just doesn't sit on the sidelines, and that they give LG a good dose of "WTF are you doing???" during their next phone call. 

What do you guys think? Am I overreacting here, or is this a pretty dumb thing to do?

Let me know what you think in the comments below!

Picture credits: Google Play (edited by myself)

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Comments

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  • Tobia Loschiavo Nov 5, 2012 Link

    This is an awesome article. I am italian and you were able to describe the essence of the problem very well. LG, redeem yourself!

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  • Eric McBride Nov 5, 2012 Link

    @Tobia - Thanks Tobia! I'm very glad you liked it!

    And yes, LG certainly has a LOT of explaining to do!

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  • Jay Chew Nov 5, 2012 Link

    i hope google will step out and give lg a big slap on their face for doing stupid things..this is really ridiculous

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  • DieBagger Nov 5, 2012 Link

    Great article, was thinking excactly the same when I first heard this "rumor" here in austria...

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  • Joel Fabiani Nov 5, 2012 Link

    Excelent article Eric, I was just starting to believe in LG again... seems I was wrong. LG is giving me more reasons to buy the Asus Padfone 2.

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  • Eric McBride Nov 5, 2012 Link

    @Jay - I really hope the same. I can't confirm it, but I could imagine this pissing Google off VERY much.

    @Diebagger - Thanks for reading!

    And yeah..it seems so far that this really isn't a rumor. I very much hope to hear a statement from LG over this nonsense very soon.

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  • Malcolm Lim Nov 5, 2012 Link

    Eric - this is not unusual, here in Malaysia, ASUS did the same thing by pricing the Nexus 7 16 GB model for RM 999 which is equivalent to approx USD 325 (compare that with the original USD 249) - that's USD 76 in difference (or approx RM 230)!

    As I understand, Google is subsidising the device due to Google's own involvement and also due to Google Play - if you can buy it from Google Play, chances are you can buy magazine, rent movies, etc - so Google is getting extra sales (or trying to) from the digital content.

    LG on the other hand, is doing what ASUS did in Malaysia - selling it at a more premium price (in line with other handsets) especially for those who can't buy it from Google Play. Sure, there are other ways to get it like purchasing it online through newegg, etc, but for the average consumer, they prefer to go to a shop, try it out and buy it - so LG definitely does not want to "subsidise" them unlike Google.

    I'm in no way trying to defend what LG or ASUS did, but I hope this makes sense - both companies are trying to make some money - where there's a demand, there's always gonna be a supply. If nobody buys from them, the price would naturally go down.

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  • Eric McBride Nov 5, 2012 Link

    @Malcolm - I see your point, but how come its only for selected EU countries then? In Germany, the price of the Nexus 4 is €299 for 8gb, and €349 for 16. But then just right next door in Spain, Italy, Austria (and more) its DOUBLE the price?

    I'm not talking euro to dollar conversion here. Im talking an Android OEM with a Nexus device selling it for double the cost through their own company, knowing good and well that Google sells it for the half. And they are doing it to people who CANT buy it from the Play Store. That's what really irks me.

    I very much understand what you are saying, but it's still a damn dirty move from LG, and I'm glad to see people saying something about it.

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  • Baron Tankhe Nov 5, 2012 Link

    Somehow I knew LG would find a way to F**K it up. But thats just based on my own experience with LG....

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  • Malcolm Lim Nov 5, 2012 Link

    @Eric - Well, the price difference is definitely weird and inconsistent, only LG knows why they are pricing it that way. Honestly, I never like LG and was rather disappointed that Google went with LG this time - but I guess Google had to give every manufacturer a try/equal chance. I believe Google will go back to Samsung for the next Nexus (or with HTC). We shall see then.

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  • Eric McBride Nov 5, 2012 Link

    @Baron - I had EXACTLY the same feeling bro.

    @Malcom - I totally agree. Samsung, HTC, and later on Motorola should be Google's Nexus picks in the future. I also had my doubts about LG from teh very beginning.

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  • hans s Nov 5, 2012 Link

    @Eric - You're missing an important point: LG doesn't sell the Nexus 4 directly to customers. They sell the Nexus 4 to retailers and RECOMMEND a price, at which the retailer SHOULD sell the phone. They are free to charge any price they want.

    So probably the retailers pay the same price to LG as Google does. But Google probably sells the phone for the same prize as they get it from LG or even subsidized, as Google not only gets money by selling the Nexus 4 hardware.

    But retailers only get money by selling the hardware, so the price for the customer will probably be higher than in the Play Store, as otherwise retailers wouldn't make any money at all by selling the Nexus 4.

    So the only way that the Nexus could be at the same price at retailers and the Play Store, would be, if LG sells the Nexus 4 to retailers at a lower price as they sell it to Google, which makes also no sense, as LG also only earns money by selling the hardware.

    In my opinion, the only one who could be blamed for the price difference, is Google, as they don't sell the Nexus 4 in all countries.

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  • Eric McBride Nov 5, 2012 Link

    @Hans - That is actually a very good point that I didn't think about. However, Google wants consumers to purchase the Nexus 4 from them directly, not from retailers. How are retailers ever going to meet low price guarantees for a 600 euro phone that can be bought on Google for 300?

    If you ask me, retailers are getting a VERY bad deal here, as are consumers.

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  • hans s Nov 5, 2012 Link

    Yeah, but LG can't do anything about it. As customer you have to pay to the manufacturer and the retailer. In countries, where the Nexus 4 is available in the Play Store, Google is the retailer, but they don't charge for their "retail service", so you only have to pay to the manufacturer.

    I think the situation for retailers in countries, where the Nexus 4 is not available on the Play Store, is better than in countries, where it is available in the Play Store, because if customers don't buy the Nexus from them, they probably buy a different phone. Either way they make money with it. If a customer buys the Nexus in the Play Store, no retailer makes any money at all, and because of the low price, I think a lot of people will buy the Nexus in the Play Store, and therefore retailers make a lot less money as if they could sell the Nexus without competing against Google.

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  • Jack Strauss Nov 5, 2012 Link

    I think before you post articles like this, a little journalism would be in order. I don't see anywhere that you made any attempt to check with LG. You base it on things you read on a site. Even assuming that those stores actually did decide not to sell the Nexus 4 because of the price, did you bother to consider that the most likely reason that they couldn't sell the product at the same price as Google is because Google is selling it as a, if not loss-leader at least not for a big profit margin? Retailers need to have a larger margin to offset storage costs, store front cost, training costs, employee cost. Even if LG were to sell it to the retailers at the same price as they sell to Google, it may still not be sufficient margin and just as manufacturers sells to Walmart at a lower cost because of the volume that Walmart brings, I would think it would be reasonable for LG to sell it to Google at a lower cost that any single retailer.

    It's obviously not profitable for any retailer anywhere to sell the Nexus phones when Google is selling it for break-even prices. The only way they can do that is through bundles or extended warranty or accessories. And each retailer would have to figure out if the numbers would work.

    This has nothing to do with LG and more to do with common sense.

    Frys used to sell the Galaxy Nexus for $600. Then they dropped the price to $525 and then $500 while Google was selling it for $350. Should Google be facepalming for going with Samsung? I asked the Frys representative who would buy the Galaxy Nexus for $150 more from them than directly from Google. His response was "You'd be surprised at how few customers are informed. We sell quite a few of these".

    It makes sense to buy the Nexus phones directly from Google. In countries that Google doesn't sell the Nexus phones, consumers have only 2 options. Either get it from a country like the US or else buy a non Nexus phone.

    It is what it is.

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  • Eric McBride Nov 5, 2012 Link

    Hi Jack, and thanks for reading.

    ZDnet, Phone Warehouse, and about 3 other sources have confirmed this. LG declined comment with multiple sources so far, which means that they are either obviously preparing a statement, are speaking with Google, or are sorting things with retailers.

    That being said, I highly doubt that production costs for the Nexus 4 are over 300 euros. That would make its costs WAY higher than iPhone and GS3 production costs.

    While I get your point about the Galaxy Nexus, its not comparable. The Galaxy Nexus wasn't sold through Google until a LONG time after its release. The Nexus 4's PRIMARY sales channel is Google Play. Google has said directly that "the Nexus 4 will cost 299 for 8gb, 349 for 16gb", and mentioned nothing about the device costing certain consumers more should they choose to purchase through a retailer. Sell it for more through retailers? Fine. But double? Common. The only Android smartphone selling that well for that price point (500+)is the GS3. Does LG honestly think that after years of failing to produce a real Android money making machine that they can retail it for MORE then the GS3?

    I don't call that common sense in any way shape or form. If it did make sense, then massive companies like Phone Warehouse wouldn't be distancing themselves from the Nexus 4 after hearing of this news. That's like the PS3 costing 300 being sold directly through Sony, but 600 in every retail shop. It's simply too much of a price difference.

    But your right..it is indeed what it is. But that certainly doesn't make it fair or logical.

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  • David H. Nov 5, 2012 Link

    Sorry I haven't read through the comments, so this is likely already covered, but we don't know exactly how much Google is subsidizing the sale of this device.

    It is probable that the price LG proposes is reasonable, since it is the price other manufacterers have set for similar devices, if that is the case it would be crazy for LG to stay close to the price on Google Play because they would lose a ton of money for every device they sold.

    While Google is huge and can afford to lose money on one device to gain market share, LG, while also huge, is nothing like Google and must make money on every product they sell, or go out of business.

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  • hans s Nov 5, 2012 Link

    Eric, you're still missing the point. As I stated earlier and it's also stated in the PhoneArena article, the price is a RECOMMENDATION. Retailers are free to sell it at a lower price. It's not like with Apple products, where the prices are fixed for all retailers.

    The SGS3 you mention, that sold well for over 500 €, has a price recommendation of 699 € (in Germany), but I saw not one retailer, who sold it at that price. It's currently around 460 € on Amazon and I think it never cost much more than 600 € there. So I highly doubt, that every retailer will sell the Nexus 4 for the price recommended by LG.

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  • Eric McBride Nov 5, 2012 Link

    Here in Berlin, the Galaxy S3 costed 620 Euros when it first came out, and dropped a few weeks later. That "recommendation" you speak of is true, and as seen with the S3, it will be used. The problem is that retailers selling it for 600, or 500, or even 400 will still have a big conflict problem, which is why previous Nexus partners are pulling out of their cooperation agreements with the Nexus 4.

    I do get what you are saying, but even comparing the Galaxy S3 isnt really valid here, as it is THE most hyped Android device of all time. Do you think Samsung and Google would have both launched that product if one company was selling it for 300, and the other for 500 or 600?

    That being said, the Note 2 debuted here for 699, but dropped to 580 a week later. Maybe the same will happen with the Nexus 4. But regardless of how retailers want to sell it, Im sure the ones distancing themselves from it have good reasons for doing so.

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  • Dvoraak Nov 5, 2012 Link

    I recently asked Best Buy why they don't stock Nexus devices. They said there was no room for profit with Nexus. Maybe Google is, in part, the villianous party here. They sell with residual profits in mind while LG, as a manufacturer, needs profit on the front end rather than the back. Either way, Google and OEMs need to line up their goals and sales strategies.

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  • hans s Nov 5, 2012 Link

    As I stated earlier, I do't deny that retailers are upset, especially in countries, where the phone gets sold in the Play Store. But that's not LGs fault. And I highly doubt that in countries, where the Nexus isn't available in the Play Store, no retailer will sell the phone. Sure, it will be more expensive, but I doubt it will cost 600 € at every retailer.

    So from the view point of a customer it doesn't make a difference, if a retailer in Germany or Spain sells the Nexus 4 or not, as I can get it in the Play Store in this countries.

    And in countries where the Nexus 4 isn't available in Play Store, you either pay the extra cost for the retailer, wait for Google to sell it in the Play Store or buy a different phone. But you can't make LG responsible for selling their phone at probably the same price to Google and retailers.

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  • Mario Zhivago Nov 5, 2012 Link

    One thing I don't understand it's that those countries that Google play store. If u type Google play es on Google you can get the link to the main page to Google play and there the tab for devices in it.

    I am also upset that is LG and really hoped would be Motorola as i love the Razr looks etc.

    Well maybe next year.

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  • LuBre Nov 5, 2012 Link

    > I also hope that Google just doesn't sit on the sidelines
    > and that they give LG a good dose of
    > "WTF are you doing???"

    I seriously doubt that Google wasn't aware of that. Prices were discussed months ago, I'd say. So everything was already set in stone and Google just let it go.

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  • ljhaye Nov 5, 2012 Link

    One thing that we forget is that the OEM's and retailers cannot sell products at cost, they have to make margin. Right now only Apple and Samsung make any money selling smartphones. Google like Amazon can afford to subsidize their hardware but HTC, LG, Sony, etc cannot. So the discrepency makes sense but it doesn't make sense to label these guys evil or wrong. Customer will complain about price until they only see one OEM making phones then they'll want variety again.

    The problem is Google trying to compete on price but at the cost of their partner OEMs' profitability.

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  • LuBre Nov 5, 2012 Link

    > OEM's and retailers cannot sell products at cost,
    > they have to make margin

    +250€ is not a margin, it's like pointing a gun and saying "give me your wallet"

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  • Robert Jansen Nov 6, 2012 Link

    I'm afraid it's going to be expensive in the Netherlands as well, with our lack of a play store for hardware.

    Say Eric, you're on a German play store account, right? ;-)

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    DaBartonator Nov 6, 2012 Link

    Sammys nexus have been ok asus ok lg horrible now I want to see what Motorola can do XD a nexus max?!

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  • hans s Nov 6, 2012 Link

    > +250€ is not a margin, it's like pointing a gun and saying "give me your wallet"

    250 € would be the recommended margin for the retailers. In the end it's not LG who dictates the margins, it's the retailers. So when a retailer sells with a margin of 250 €, complain to the retailer, not to LG.

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  • LuBre Nov 6, 2012 Link

    > 250 € would be the recommended
    > margin for the retailers

    It WOULD BE for another phone, yes. Not for the Nexus 4, that lacks some stuff like removable battery, LTE, SD slot and so on. It's NOT a "top" phone. It's cool and all, but only if they sell it for a decent price (say around 400€). For 590€ I can find better alternatives (and some of them are even cheaper).

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  • hans s Nov 6, 2012 Link

    I think a lot of you still don't know the meaning of "recommended price". When LG "recommends" a price of 599 €, it doesn't mean, that the retailers are forced to sell at this price. The retailers are free to charge any price they want. They could even charge a higher price, but I highly doubt that. I also highly doubt, that there will be no retailer that sells the Nexus 4 below the recommendation. That said, if you compare prices at retailers you will surely find one that sells the Nexus 4 well below 590 €. You won't find a retailer, that sells for < 400 €, because then the retailer wouldn't earn a reasonable amount of money.

    Also for me, the Nexus 4 is a top phone, as it is generally very well spec'd. The missing things you mention aren't features that make a top phone, they are features, that not everyone needs, but could make a difference when selecting between similar devices. Or would you say that the iPhone is not a top phone, because it lacks a removable battery, an SD slot and LTE, that works globally?

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  • LuBre Nov 6, 2012 Link

    The iPhone has ALWAYS been like this. No sd, no removable battery and so on. The android market is different, that's why I consider those missing "things" extremely important (if LG asks me 600€).

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  • Marcel Viola Nov 6, 2012 Link

    Most people who have experience with LG and their let's call it "companie policy" thought that can't be true there must be a catch. And...tatata...here it is. thx Eric, damn good articles! You talk a lot people from the heart they knew beforehand that LG was a bad idea.

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  • hans s Nov 7, 2012 Link

    > The iPhone has ALWAYS been like this. No sd, no removable battery and so on.
    Except for the Nexus One (which is obsolete), no other Nexus device has a SD card slot, so you could almost say, that it's normal for Nexus devices to lack a SD card slot.

    > that's why I consider those missing "things" extremely important
    Yeah, YOU consider those things important.
    In the past, I also considered these things important, but as longer I have my current Android device, the less I really need a SD card slot or a removable battery. My current phone (SGS I9000) has a SD card slot and a removable battery. I never ran out of space, despite only having 8 GB internal storage and a 4 GB SD card. I also don't know, what was the last time I removed my battery, but it was a long time ago.
    On the other side, the latest official firmware for my phone is Android 2.3, despite being hardware wise almost identical to the Nexus S, which still receives official updates to the latest Android versions.
    When I bought my phone, I prefered the SGS because of the SD card slot. If I reconsider my decision now, I would take the Nexus S, because firmware updates matter to me and I hate Samsungs update policies.
    If updates matter to you, the only real choice is a Nexus device. If other things matter more, buy a phone with these other things. Be grateful, that you have the choice.

    > if LG asks me 600€
    Again, LG doesn't ask you to pay 600€. If there's someone who asks you to pay 600€, it's the retailer. LG asks the retailer for much less than 600€ and it's up to the retailer to decide, which margin he adds. So don't complain about LG, when it's the retailer who's (in your words) pointing a gun and saying "give me your wallet".

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  • Thejus Rao Nov 7, 2012 Link

    Bulleseye.

    Question- IS the retail price only in select euro countries or on all the countries which do not have play store?

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  • hans s Nov 8, 2012 Link

    I just read about two retailers in Germany, where the phone is also available in the Play Store. One of them offers the 8GB model for 349 € and the other offers the 16GB model for 395 €, so they are about 50 € more expensive than in the Play Store. Thats not too much difference, as the retailers also have the advantage, that you don't necessarily need a credit card.

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  • CJ Brown Nov 13, 2012 Link

    what a horrible path for LG to pursue (they won't win Customer loyalty behaving like APPLE) ....


    I'd rather invest in a Samsung Note I as soon as it is available in the "No Contract" market (that is my prediction, left over consumer electronic goods replaced by a newer model will receive software upgrades & get repurposed into the best market where they WILL sell - & that is thee No Contract Market) ....


    C J

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