Google is selling its Nexus 5 Android smartphone at around a £50 less than other retailers can buy it, according to one retailer.
The much-anticipated new flagship smartphone costs £300 directly from Google’s own Play store.
While it is unknown how much Google pays for each unit of Nexus 5 from its manufacturing partner LG in South Korea, other resellers are "able to buy the phone from LG for around £350" according to a retail source talking to the Guardian – £50 more than Google is currently selling the phone for on the Play Store.
Familiar ground
“We saw the same thing with the Nexus 4,” explained Ben Wood, mobile analyst with research firm CCS Insight. “With the Nexus line, Google always goes for very aggressive pricing with its manufacturing partner.”
The advantage of being part of Google’s Nexus programme is early access to new versions of Google’s Android operating system, which gives device manufacturers a leg up on the competition and Google leverage over their partner.
HTC enjoyed success as one of the first Nexus partners, and Samsung’s participation within the programme with the Galaxy Nexus was arguably part of the reason why the Samsung Galaxy S III sold so well.
Nexus programme put LG smartphones back on the map
For LG, Google’s current manufacturing partner, the Nexus programme put its smartphone back on the map, although it still has some way to go to match its South Korean neighbour, Samsung.
“Although it is unlikely Google would sell the Nexus 5 at a straight loss, it is highly likely that it would sell it at around cost or with very little margin,” said Wood.
“Google will only sell around 1-2m Nexus 5s, but they will be bought by key people – Android evangelists, developers and influencers – spreading the Android brand,” Wood concluded.
Despite apparent high demand due to stock shortage, the Google Nexus 4 sold under 400,000 units in three months in January, according to analysis of phone serial numbers.
• In October, Google launched its next iteration of Android 4.4 “Kitkat” along with the Nexus 5 complete with an always-listening voice search, full-screen immersion and support for low-power sensors
