54910-nexus5Look, don’t take this the wrong way as I’m not suggesting buying the Nexus 5 from your carrier of choice is a bad move, except that’s exactly what I’m saying. The thing is, it isn’t even the carriers fault as they are simply passing on their cost of the Nexus 5 purchase from LG/Google directly to you. Sprint and T-Mobile have both confirmed that their cost of the Nexus 5 is $450 indicating that Google is subsidizing their pricing of the Nexus 5 via the Play Store. Just like last year’s Nexus 4. 

Yes, there is an argument to be made that not having to fork over the entire up-front cost is something that could appeal to many potential Nexus 5 buyers. However, in the long run I’d rather see customers saving the extra $100 and putting it toward apps, accessories or paying the electric bill. It’s likely Google is taking the $100 loss in the hopes of pushing customers into the Play Store where they will grab apps, books, movies, magazines and all the other things Google will make a profit on. More Nexus users means more Google Maps and search use, more money, more money…

9to5-image 2013-11-10 at 9.47.41 AM[Ed. note: If you want to save even more money, T-Mobile still offers a super secret Web only $30/month pre-paid plan (meaning little-no taxes) that works great with your Nexus 5.  You have to scroll to the bottom of T-Mobile's plans page to find it---->.  It includes unlimited data (throttled at 5GB), unlimited texts and a sparse 100 minutes of talk time.  If you aren't a talker, you are looking at $360 for a year of unlimited data + $350 for the best Android phone (under $60/month total) out there!]

Realistically, this is the same discussion we saw play out with the release of the Nexus 4 on T-Mobile when they charged a higher price tag than Google’s own Play Store. During that Nexus release I also advocated purchasing from the Play Store when I solely covered the T-Mobile beat and instantly recognized that T-Mobile was just passing on their cost. Now, I recognize that T-Mobile isn’t gouging us or setting their pricing so high as to make sure they profited on the sale of the hardware.

The Uncarrier was simply breaking even on the handset itself. T-Mobile wins by having you purchase the device through them and thereby having you as a paying customer rather than buying through the Play Store and risking you ending up on Sprint or AT&T. Like any good competitor, T-Mobile is just trying to keep business in-house and offer a lower up-front cost they hope appeals to a percentage of Nexus 5 buyers. It’s a sound strategy and I absolutely see their reasoning in implementing it, as I do with Sprint but that doesn’t mean I wouldn’t for a second suggest that if your heart is truly set on the Nexus 5…just buy it from the Play Store.

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19 Responses to “Editorial: Please save $100 and only buy the Nexus 5 from Google’s Play Store”

  1. I had already discovered this savings. We wondered, though, does the unlocked phone bought from Google Play store work completely with ATT or T-Mobile? I mean do all the features work as if you had purchased a branded phone? We would love to buy a phone that would work with either. We left ATT because it got so expensive and went to T-Mobile. T-Mobile fits our budget better for 4 phones but doesn’t work nearly as well when you leave our metro area and we travel outside the area frequently. So we would love to the ability to return to ATT if our financial situation changes. Thanks for the info.

  2. Google Play phones do not report hotspot usage as carrier sold phones do. So my GPE Samsung s4 blazes like a router all day, fueling bandwidth for all the PC’s tablets and even Netflix in the house. I used 100+Gigabytes last week. T-Mobile sees it as only data to the phone itself, no not spottingis identified to their network. Buy phones from google, NOT your carrier, if you are on T- Mobile! My rate plan is unlimited data to the phone, with only 2.5 gGB of hotspot usage, since computers demand much higher bandwidth. The client side reporting of google phones lump it all into a single bucket of data, all direct to phone. Buy the same Nexus 5 for example, from T-Mobil and you’ll get throttled. Never with a nexus 5 purchased from GPE!

  3. Alain Lafond says:

    Don’t you think that the real thing is that Google is selling the N5 with a small marging. And that carriers, as always, are fooling their customers…
    Sorry, but for me it’s a lie that a device that contains $150.00 to $200.00 parts worth $450.00 to $700.00 even $990.00 when they gets to north america… Who gets his pockets full.
    Think about this…

    • Thank you. I have been thinking the same think every time I see these stupid articles talking about how much Google is subsidizing the phone. Either these writers are just stupid sheep like the rest of the incompetent idiot lemmings in this country or they are trying to help spread the lie to the lemmings. An Apple iPhone 4 cost $181.74 per unit including R&D costs, labor, product transportation, and marketing.

      Even when your cell phone carrier is subsidizing a phone they are NOT losing a dime.

      • FYI since this will never get posted anyway as I am sure the author will try and continue to cover up the industry lies…

        http://www.investopedia.com/financial-edge/0912/the-cost-of-making-an-iphone.aspx

        http://m.digitaltrends.com/mobile/iphone-cost-what-apple-is-paying/

        http://www.cellular-news.com/story/34577.php

        That last one is for the last Nexus not the current but if you think it’s any different now you are a dumb sheep. In fact looking at the latest Nexus 5 (and it still has a garbage camera) with its new higher cost over last year I would say they are making even more on this model. Do you really think it costs $50 to $100 more for 16 extra GB’s of RAM? You can buy a 32gb class 10 microSD card for $25 on Amazon and I didn’t even bother to try and look elsewhere because that price proves my point. These scumbag tech companies have been overcharging for RAM for years and now Google lies to its customers and says “removable media confuses customers” as its excuse to continue overcharging for storage space. Removable batteries are not going out of style because of form factor that’s a total lie, its so you can’t take out your battery and get a new one when it needs replacing and so the government can track you. Microsoft just patented technology now in the Spybox One that can turn on any devices camera and microphone connected to its network (regardless if they made the device) as long as it’s in a low power state. News flash you idiots: Your (stock) iPhone and some Android devices (my guess is it will soon be all Android devices) never truly power off, they just enter a low power state.

        The ignorance and incompetence of the average consumer sheep in this country blows my mind. $500 billion in 16 years (Google was founded Sept 4 1998) does not lose money on anything they do. Everything is according to plan. Bahhhhhhhh Stupid Sheep.

      • In response to the reply to your own comment, since I can’t reply to the reply itself.
        Goggle is a company out to make money, if that upsets you then there is truly something wrong with you. Companies are there to make money, that is how things work.
        Saying people are stupid sheep is going to solve nothing at all, only make you look like an ass.
        What are you doing to change anything?

  4. Prem Suraj says:

    Isn’t this more of a common sense thing..

  5. I believe I can get this phone for $0 next month on contract.

    This phone is $50 on amazon for 16 GB on Sprint. If BB will price match (the manager at my store told me he likes to ‘hook up his customers’ and price match even though they do not have to) then I will get this phone for free on contract because of the 2013 BB Mobile Freedom $50 off offer.

    I think that beats $390 off contract after sales tax.

    I also have $35 in BB Gift cards, so that should cover my zagg + installation and possibly a case. I do not think one could do any better than that.

    • I think that the recommendation to buy it from the Play Store was aimed more at T-Mobile customers and Sprint customers that aren’t upgrade eligible. Since Sprint doesn’t lower the monthly charges for people who bring their own devices, it makes more sense to take the subsidized device from Sprint if you think that you will stick with them for two years anyway.

  6. Preach this from the housetops David! Regardless of the reasoning for the companies to charge different prices for the Nexus 5, the consumer is only faced with two choices: pay $450 or $350 for the exact same device. I don’t understand why this isn’t a no-brainer.

  7. James Katt says:

    Google Fans, buy only from Google. Piss off Samsung. Yeah!

  8. Why do you think ATT decided not to carry the Nexus 5? It kind of sucks to pay full price for a phone and then still have to pay their super high rates without taking a subsidy. With their recent hikes, 2gb of data for an individual after all the fees is going to be over $100. Meanwhile , if it works, you can get 2.5gb of ATT data on Straight Talk for $45.

    Given that, Im surprised Google doesnt team up with no contract/prepaid carriers for a mass market push on the Nexus 5. They never seem to do a mass marketing campaign and the phone continues to be targeted toward developers and Android geeks/phandroids. If I hadn’t started reading blogs, I wouldn’t even know that this phone existed – let alone for this rock bottom price.

    Although I don’t use this feature, I think Tmobile should have worked with Google to have wifi calling on their version and justify the extra $100

  9. Are you 100% confident that LG charges Tmobile $450 for the Nexus 5?
    Regarding the $30 Tmobile plan…Another blog reported that if you bought the device from Google Play, you couldn’t activate the Walmart plan. It quoted a TMobile rep saying you had to buy it from Walmart and activate it on Tmobile.com. Ive read other people say they already are using their Nexus 5 on the $30 plan so were they existing customers who just switched their SIM card or do you really have to buy from Walmart. (I don’t think that was the deal before)
    What do you think about Google not updating the Galaxy Nexus. It feels like a bait and switch to me with the 18 month excuse just an arbitrary excuse. If KitKat is supposed to make Android more widely available and work on ‘lower end devices’, why couldn’t it be sent to the GNex? Even if some feature wouldn’t work, at least send the ones that do and give users the opportunity. Many people have had it less than 18 months and thought that timely updates actually meant that. Just doesnt seem fair.
    And why does Google never add better cameras? Does it add that much to the cost?
    Does anyone do a teardown of the Nexus like blogs do with the iPhone. Curious what they would say the actual cost is from Google.

    Lastly, I wish Google (and Apple) would do a better job of inventory. They have a year to plan their releases so I don’t know if its just a marketing ploy to create media frenzy when items are ‘sold out. (Hanukkah starts on Thanksgiving Day this year so a 3-4 week wait will not make the gift giving season)

    • By the way, on the Tmobile website it says the $30 plan is for devices purchased at Walmart OR activated on Tmobile.com so maybe you have to just activate it on the website…I

      • I took my $30 Sim over from another phone and it worked fine. I don’t know why it would be an issue. If tmob is trying to block Google play nexuses from the plan, there is an easy work around

    • I am using a Nexus 5 on TMobile’s $30 currently so I can say it works in my case. Whatever other Blog reported that, it isn’t the Walmart plan, it is the Web plan that also works at Walmart.

    • I bought the S4 from Google in July & then got the $30/100 T-Mobile plan in-store. Maybe that Wal-Mart nonsense is just there to steer the unsuspecting from signing up for their cheapest plan. It certainly doesn’t seem to be a hard & fast rule.

      Also, if you get the plan (or any T-Mobile prepaid plan) & have GVoice, you’ll need to ask T-Mobile to turn off your voice mail. Otherwise T-Mobile’s will intercept your unanswered calls.