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You'll pay a lot more for an unlocked Nexus 6 smartphone

Matt Hamblen | Oct. 21, 2014
US$649 for 32 GB Nexus 6, while subsidized carrier prices are expected to be much lower.

Some analysts and bloggers have said that Google is deliberately driving more customers to the lower, subsidized carrier sales by selling the unlocked version on Google Play for $649. Others disagree.

"It's a little farfetched to think Google is pushing Nexus 6 buyers to carriers," said Kevin Burden, an analyst at Strategy Analytics. More likely, he said, is that Google has bumped up its price for Nexus 6 out of a historic industry practice of bumping up prices for premium phones that haven't sold well.

"You tend not to see these price jumps with popular phones, and when you do, it's on phones not selling well," Burden added. He said both HTC and Sony have bumped up prices on previous phone models to "imply a premium that's more of a guise than anything."

Burden said that phone manufacturers, including Google through Motorola, must spend time and money to build an effective brand such as the Nexus line. "The cost of building a brand is high," he said. "Not only phones sell, but brands sell, and you've got to deliver that 'premium' belief to users. It's one tactic to use and not everybody has been successful with it. Raising prices might also be about recouping costs on a poor selling phone line."

Nexus smartphones first started selling in January 2010 with the Nexus One, made by HTC and running Android 2.2 Froyo. There have been five models since then from different phone makers, including the Nexus 6.

Rob Enderle, an analyst at Enderle Group, said the first Nexus phone was portrayed as a premium device. "With Nexus 6, Google is moving Nexus back into a technology leadership product," he said. "This is their closest effort to the iPhone and this Nexus 6 showcases a return to that focus."

Enderle also argued that Google is using the Nexus 6 to counter Samsung and its top-selling Android line of Galaxy smartphones. "Samsung has basically owned the Android market for phones, so think of Nexus 6 as Google's attempt to pull control of the Android experience back from Samsung."

Jack Gold, an analyst at J. Gold Associates, said pricing strategies for smartphones can be designed to serve many purposes. "I think Google is saying with the $649 price that it won't try to compete directly with its good partners making Android phones in the $400 and lower space, and then position Nexus 6 as a premium device," he said. "This keeps the partners happy."

As for the potential $200 price on contract from carriers, Gold added, "That $200 is probably more about the need to be competitive with Apple devices. The individual carrier, and Google, want to at least make them competitive to see how well they sell."

There are, indeed, some devoted Nexus smartphone users, but from a marketing and pricing standpoint, it's likely that the Nexus 6 will be another experiment for Google.

 

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