17
Jan
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Since day one of availability, everyone's question about the Nexus 4 launch has been - in essence - what went wrong? Well, a lot of things. But number one on that list has been the very limited supply of phones available for purchase.

Recently, LG's head of mobile in France Cathy Robin was interviewed by French publication Challenges, shedding some light on the availability issue. Now, you could read a Google translation, but we all know how that goes - things get lost. Fortunately, Reddit user floflo81 has actually posted a human-translated version of the interview, which you can read here. And trust me, there are things in there you'll want to see.

Alternatively, you could read this summary / analysis of the interview, which gets to some of the key questions and issues addressed therein.

The supply problem: fixed by mid-February?

Let's cut to the chase: when will you actually be able to order a Nexus 4 and get it in a reasonable amount of time? According to Robin, by mid-February there will be no more "tension" in the market. LG is increasing unit shipments as quickly as it can, but jumps in production won't actually be felt in the marketplace until six weeks after the ramp-up starts (which makes sense). Now, whether Robin means worldwide, in the EU, or just France isn't clear. So take that with a grain of salt.

But what was the reason for such limited supply from day one? Underestimated demand, according to LG.

Why was demand underestimated?

While Robin says it's nobody's fault, she also pretty much says it's totally Google's fault in the same breath. Robin claims Google submitted orders to LG for Nexus 4 units based on demand for previous devices, eg, the Galaxy Nexus. But when the phone went on sale, demand vastly exceeded that estimate. In some markets, like France, the demand was underestimated much more severely. I can only guess that a similar underestimation is afflicting us here in the US.

And really, that is Google's fault, if it's true. And why wouldn't it be? Google is LG's customer: Google commissions the phone, it buys them from LG, and sells them to consumers. LG also sells part of the supply to carriers (like T-Mobile), though it's unknown just how cheap those carriers are getting them for, or if Google is paying less than everyone else. Robin says LG would "have no incentive" to sell a smartphone at a loss, so that still means even Google is paying at least slightly more than cost for these devices.

How many Nexus 4's have been produced?

Robin says that the internet estimate of 375,000 units is "a lot lower" than the actual figure. She provides no specific numbers.

Why are some carriers and retailers selling the Nexus 4 at a much higher price than Google?

Robin insinuates that, for carriers, it's a lot better to incentivize a contract than to sell an unlocked phone for a low price. Which makes sense. She does not say whether LG charges customers other than Google more, but my bet is that's at least partially to blame. Google will be LG's biggest customer, and so it probably gets a better volume discount. There is a lot of incentive to sell it to Google cheaply, too. LG gets to be totally hands-off in marketing and supporting (other than warranty repairs) Nexus 4's sold through Google Play, which saves a lot of money. Google helped design the phone, as well, and it's Google's name that really generates the demand for it in the first place.

Other Stuff

There were a few mildly interesting tidbits jammed into this interview that weren't Nexus-related, so let me just bullet point them:

  • It sounds like LG is ditching phablets in the European market, though that probably means the US market, too (Asia will still get the Vu 2).
  • LG won't be embracing Windows Phone 8 any time soon, it's "not high-priority."
  • 1 million Optimus G's have been shipped.
  • The "G" brand will be sticking around, representing LG's top-of-the-line products.

And as I said previously, if you want to read the whole interview translation, check out this Reddit thread. You can find the original article here.

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • droilfade

    So basically......it's Google's fault!

    • http://www.androidpolice.com/ David Ruddock

      At least she said it sort of nicely.

      • Leandros99

        It is Googles fault, but who the hell calculate such a heavy demand?

        • Josh Brown

          When you're dealing in such low margins, it makes sense to be conservative on your estimations. That's not to excuse Google, only to understand the situation.

          • tyguy829

            since google knew they were selling such a high end phone unlocked for such a low price, they should have had pre-orders for a couple of weeks to get an idea of how many to produce.

          • Sean Lumly

            Exactly right.. I do wonder, however, if Google intentionally chose a number and risked shortages. I can't imagine that Google meeting the N4 demand, in this case, would send a good message to its partners.

          • Franky

            Interesting idea. I for my part found it very hard to believe that google had such little/ such wrong information about the estimated demand. I mean, we're talking about Google here. If they're good at one thing its accumulating data about users.

            Could it be a calculated shortage to create more demand for alternative high-end android devices? That would at least make sense considering the benefit for the platform generally.

          • Sean Lumly

            Indeed. Or setting an upper limit on availability as not to provide incentive for it's partners to look at other platforms as a means for profitability.

            What chance would they have in the wake of a premium device, with first hand access to the latest software, at literally half the retail cost of their top devices? I can certainly attest that the Nexus 4 is a premium device as I am extremely happy with mine.

          • http://www.facebook.com/profile.php?id=1242813793 Marcel Bennett

            I concur with this. I found it peculiar that they would estimate such low demand giving just how popular their devices were getting going from the Nexus 1 etc. I believe this was a way to generate demand by making supply limited.
            Survey shows when there is less of something that folks want they talk more about it and that makes more people interested in said product which makes more and more people go and purchase it to see what the hype is about.

          • Thomas

            And it doesn't take too much imagination to figure out that you may want to overestimate based on sales of the last device when you're releasing a device that for all the european markets will be 200-300€ cheaper than the competition (On Android/WP8 that is, it's even more on iPhone)

          • Eric Jones

            Since we don't know the numbers, it's hard to say whether they goofed up, or it's just a ridiculous amount of phones. If they tripled the amount of phones of the previous nexus, and that wasn't half as many as people tried to buy, they would have acted correctly, but still been wrong. Now if they only ordered 10% more, they goofed up. It's also better to err on the side of not enough phones, vs having too many.

        • FrillArtist

          "It is Googles fault, but who the hell calculate such a heavy demand?"

          That's the job of the supply chain department and logistics which incidentally is also what I am studying in college right now. They deal with the movement and sourcing of raw materials from suppliers to delivering the finished goods to consumers. Anticipating demand and shortages or surpluses in supply is a key part of supply chain management.

        • Matti

          Google could, considering they know the browsing habits of anyone who's signed into his/her google account.

  • http://www.twitter.com/andrewpalozzo Andrew Palozzo

    Interesting... they've sold more than 1 million Optimus G's... The nexus 4 is surely more popular than that device and in more peoples hands. I don't know anyone with an Optimus G.

    • http://www.androidpolice.com/ David Ruddock

      Well, you have to realize that's Optimus G's in the entire world. I'm betting they sell a lot of them in Korea, for example.

      • http://www.twitter.com/andrewpalozzo Andrew Palozzo

        Yeah.. true.. I thought of that too... but on the other hand I didn't even think they went up for sale in the big markets... I know definitely not in Australia.. and I hadn't heard much news from the US or UK about them.

        • deltatux

          Korea is a rather large market, I've seen Optimus G's floating around in Asia as well. US and Europe, while they are rather big, aren't the only big markets out there. China for instance is the world's largest cellphone market in its own right.

    • Mike Reid

      I agree, I find that strange.

      XDA forums for Optimus G are DEAD, compared to Nexus 4 forums.

      So, Koreans or whomever don't use english language forums ? So where are the forums of these phantom Optimus G owners ?

      Granted, XDA forums always favor Nexus over non-Nexus, and the price differences I've seen between N4 and OG are drastic.

  • adi19956

    It's worth the wait, the Nexus 4. It's bloody brilliant

  • http://twitter.com/Telanis_ Telanis

    How much did the GNex actually sell? I can find revenue estimates but not hard numbers. Hopefully this means the Nexus line will continue to avoid pentile displays in the future....

    • Ryuuie

      According to Samsung during their first suit with Apple, the Galaxy Nexus sold 0.1% of the smartphone market. Nothing Apple should've been worried about and thus shouldn't have to get a ban on.

      The Galaxy Nexus sold pretty bad on Sprint, as did the Nexus S 4G. In fact, the NS4G was Sprint's lowest selling phone for 2011. Also, considering that carrier locked Nexuses don't sell well at all on Craigslist or eBay compared to other phones or even to their GSM cousins, Nexus devices just don't do so well (outside of the 7 and 4, obviously).

      • blix247

        As a whole, yes they don't sell much. If you follow at as a trend, Nexus is a legitimate brand, and getting more serious with each version.

  • JonJJon

    When do you think Google will apply most attention towards pushing the Nexus 5 out the door more successfully and efficiently, and forgetting selling the Nexus 4 through their Play store? I'm just interested to know if Google want to put this retail fiasco behind them and restart and retry with the new device more successfully. A year, less, more?

    • http://codytoombs.wordpress.com/ Cody Toombs

      Why are so many people so eager to rush for the next Nexus phone. Don't get me wrong, it's like anything, I'm as eager as the next person for the next step in the Nexus line...But, it seems like everybody wants Google to just scrap the N4 and rush to releasing the next generation in a few weeks. With a couple of pretty minor issues, the N4 is an awesome phone.

      • JonJJon

        I don't believe I said I was eager for the next nexus phone at all, merely asking a question which I thought was perfectly ok to ask. I'm actually one of those people that isn't a huge fan of how quickly technology is moving atm and would be happy with the Nexus 4 for 2 or so years, heck I'm going to have this GS3 for 2 years minimum. I didn't say anything against the N4, my mate has one and I do think it's a brilliant piece of hardware.

        • http://codytoombs.wordpress.com/ Cody Toombs

          Sorry, I must be grouping you unfairly. There's been a deluge of rumors going around that claim the Nexus 4 was cancelled and the next Nexus is releasing at MWC with KLP installed (stupidest part of the rumor). There are an assortment of variations on those two stories, but they both sound ridiculous. Entirely too many people are believing that story, which doesn't make any kind of sense.

          • JonJJon

            No worries, I often get strong thoughts I just have to put down when reading several comments and it'll end up on at least someones comment. I certainly don't think Google should release a new nexus phone for at least a year (preferably more, maybe 18 month cycle for the N4). Although rumours are usually all in good fun and anticipation, perhaps there have been far too many this past year. Android is at a great place where it can afford to have many incremental point updates as it is, at least in my opinion, quite far ahead of any other mobile OS. I'm hoping the Nexus 5 can be a game changer in terms of battery life more than anything else in comparison to the N4 and also that the next big Android version comes when it is needed, not because people want a new dessert name out quickly. It is not needed now, won't be till at least way after Google IO, they may not even announce it then this year, who knows! Hmm seem to have been rambling on a bit.

    • selonmoi

      It's absurd to think that underestimated demand would cause Google to abandon the Nexus 4 or push up its plans for the next Nexus. Clearly they did a fantastic job of designing the thing, they only failed to realise how popular it would be.

      The only logical thing to do is exactly what they're doing: get LG to ramp up production, and meet that demand!

  • Floflo

    Sorry about the so-so translation of the original article (yup I made it). Nice summary/analysis by the way.

    • Christopher Iverson

      Thanks for translating!

  • http://twitter.com/andrewf Andrew

    I just want get one already.

  • Tyler Jones

    I got very lucky with my order. I got my 16 gb nexus 4 a few weeks before Christmas. For those who still want one i suggest waiting. The phone is beyond my expectations and it's purely perfect

  • http://twitter.com/TKfromCLE Terry Kessler

    I don't really care whose fault it is. All I know is that I have $800 trying to burn a hole in my pocket, and it is becoming increasingly difficult to hold out for 2 Nexus 4's.
    Daddy needs a new smartphone!!

  • Justin Dugan

    I still can't believe that mine came the way it did. I ordered it when they were still quoting 6-7 weeks for delivery. Mine shipped the next day and arrived two days after I ordered it. I sold my GS III to get it and I'm so glad I did.

  • Christopher Iverson

    So short version is that the logistics people looked at previous sales and ordered off that. I imagine El Goog has something that could track the buzz that this phone was getting. Then again that is not generally accurate. Ahh well T-mobile got my cash for an unlocked phone.

  • http://www.facebook.com/bella.pease.75 Bella Pease

    This is Cathy Rubin from LG, she is quite plain looking, but her eyes and smile indicate that she would be very dirty in the bedroom

    • Floflo

      Dude...

    • TechGuy21

      come on man...

    • http://riteshtripathy.wordpress.com/ Ritesh Tripathy

      You're pathetic..

      • http://www.facebook.com/bella.pease.75 Bella Pease

        hey you bananaboat muthafucker, keep your hands off the white meat and stick to the manky mules you can find on your buses!

        • http://riteshtripathy.wordpress.com/ Ritesh Tripathy

          Nice try, ignorant, racist dickhead..!

  • db.

    A note to Google:
    WARNING!! The use of France or for that matter anything French, will exponentially complicate anything connected an issue. (They can't help it, they're..well... french).

    • http://www.facebook.com/bella.pease.75 Bella Pease

      The cheese eating, surrender monkeys still have done more for world culture than the US of A.

      • http://codytoombs.wordpress.com/ Cody Toombs

        Are you saying our contribution of deep-fried oreos and American Idol isn't great for everyone?

  • didibus

    Mine is coming today!

  • Jameslepable

    mine just been dispactched :-D

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