Android software comes both on Google Nexus devices (OEM by HTC, Asus and Samsung) and also on those manufacturers’ brands. Google’s relationship directly with end users counterbalances those with mobile carriers, device manufacturers and open source developers.
John Langerfeld, director of business development for Android, was interviewed in the New York Times.
Q. How did you get the prices lower?
A. Basically we felt that we wanted to prove you don’t have to charge $600 to deliver a phone that has the latest-generation technologies. Simply that level of margin is sometimes even unreasonable, and we believed that we could do this. For Nexus 7, we were able to ramp those new memory SKUs at the same price. These move so fast that we knew after a few months, from an economical perspective, it was doable. Between us and our partners we have a very good understanding of supply chains. We’ve all done the best we can to really reach these prices — $399, $299 is pretty amazing, if I may say so.
Q. I noticed each Nexus device is made by a different manufacturer. Is this to keep the playing field fair for Android partners?
A. It’s not so much fairness as it is to sort of work with partners who happen to be in good “phase match” with us in what we’re trying to do. So Samsung just happens to be in a good phase match on a high-end display, which is exactly what we wanted to do at a low cost. LG had a good phase match with the hardware they were working on. Asus as well. It’s just more about the timing being right.
We’ve always done that with our lead devices. Even before the Nexus One we did the lead device with HTC. We did the Xoom, which was a lead device with Motorola. And now we’ve sort of streamlined what the Nexus program is. We did really well with the Nexus 7, I feel, because nobody really pushed the envelope with seven-inch in terms of price and performance. It really proved that category. We felt the 10-inch category was overpriced and underpowered, and we wanted to see what we could do for that from our perspective.
Interview by Brian X. Chen | “One on One: Google Android Director on Nexus Strategy | Nov. 2, 2012 | NYTimes.com at http://bits.blogs.nytimes.com/2012/11/02/android-nexus-strategy/
An analyst sees the Nexus as giving Google some leverage over mobile phone carriers.
… a Nexus device is about openness first and foremost. That does not mean Google won’t make compromises with the Nexus program. It simply means that Google will only make compromises when it comes to increasing openness. Why? Because Google benefits from open devices as much, or more than you do. [….]
Google is pushing the idea of openness with the Nexus devices, but it’s not an entirely altruistic endeavor. By giving us cheap and open devices, Google is making sure it’s in control — not the carriers. That’s better for the consumers, but it’s also better for Google. The only reason Google can afford to eat the profits on devices like the Nexus 4 is that it has a thriving ad business.
It has been said that when more people use the internet, that’s good for Google. This is even more true when people are using the internet on a device sold and maintained by Google. Mountain View gets to slurp up more of our data, show us more location-aware ads, and drive adoption of its services. Maybe in this case, freedom really isn’t free — but it sure tastes sweet.
Article as Ryan Whitwam | “Google’s Nexus 4, 7, 10 strategy: Openness at all costs” | Oct. 30, 2012 | extremetech.com at http://www.extremetech.com/computing/139104-googles-nexus-4-7-10-strategy-openness-at-all-costs
The collaboration between the Google Android team and device manufacturers can also enable speed, through the exploration of mutual interests.
So is the Nexus 7 really just a re-skinned version of that ASUS tablet? Not exactly. “We get an idea, we look at the ecosystem and ask ourselves ‘What do we really need to focus on as a reference device?'” ASUS, Brady says, had just the right mix. “We loved what [ASUS] did with the Transformer Prime, all these gorgeous devices, and we approached them to see if they wanted to work with us. They showed us some early designs of what could be done with a 7-inch tablet and we didn’t need to look any further.”
Google decided to pull the trigger on the project in late February and both companies immediately made a significant contribution. Google set aside an entire building just for the development and ASUS shipped in upwards of 30 engineers to work there for the duration, many of whom looked on proudly from the seats at this year’s Google I/O keynote. Brady is understandably proud of “start to finish in four months.”
Article by Tim Stevens | “Google’s Patrick Brady tells us how the Nexus 7 went from ‘start to finish in four months'” | July 2, 2012 at http://www.engadget.com/2012/07/02/how-the-nexus-7-came-to-be/