This presentation will provide you with a deep knowledge of the pricing and product strategies adopted by Google Nexus in order to make a name for themselves in the smartphone market. This will also emphasize the reasons behind each strategy and how it got Nexus to grow so quickly.

1. PRICING AND PRODUCT STRATEGY
FOR GOOGLE NEXUS
Team Members:
• Vaneet Chaudhary
• Siddhant Sharma
• Jason D’souza
• Pranjul Misra

2. NEXUS
• Nexus, developed by Google, Inc. in 2010 is a line
of smartphones and tablets that run the Android
operating system.
• It is the first physical initiative of Google to enter the
smartphone market.
• Nexus phones have had a brand image of being
pure, fast and affordable.

3. MORE ABOUT NEXUS
• Google, Inc. issues a tender/contract to one out of
multiple companies vying for it annually.
• The chosen partner Original Equipment
Manufacturer (OEM) designs and produces the
phone under Google's guidelines.
• Google itself indulges in developing and marketing
of the product.

4. PARTNER OEMS
 Nexus One, Nexus 9: HTC
 Nexus S, Galaxy Nexus, Nexus 10 : Samsung
 Nexus 4 and Nexus 5: LG
 Nexus 7: ASUS
 Nexus 6: Motorola

5. BRAND EXTENSION
Line
Extension
Brand
Extension
Multi
Brands
New
Brands
ExistingExisting NewNew
BRANDNAME PRODUCT CATEGORY

6. ENDORSING BRAND STRATEGY EXECUTED BY GOOGLE
Google
Google Search
Source: Strebinger, A. (2004). Strategic Brand Concept and Brand Architecture Strategy–
A Proposed Model. [online] www.acrwebsite.org. Available at:
http://www.acrwebsite.org/volumes/v31/acr_vol31_181.pdf

7. 3 LEVEL ARCHITECTURE
 Google phone uses 3 level brand architecture
 3 names involved: Google, Nexus, Partnering OEM
 This strategy practiced by Google to survive in the
phone industry

8. NEXUS ONE
 Partner OEM: HTC Corporation
 Launch: January, 2010
 Price: Contract - $179 (T-mobile)
Full Retail - $529
Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for the
Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

9. 0
0.2
0.4
0.6
0.8
1
1.2
Droid iPhone Nexus One
Launch Sales Comparison through day 47
Launch Sales
Comparison through day
47
$(Million)
Farago, P. (2014). Day 74 Sales: Apple iPhone vs. Google Nexus One vs. Motorola Droid.
[online] Flurry.com. Available at: http://www.flurry.com/bid/31410/Day-74-Sales-Apple-
iPhone-vs-Google-Nexus-One-vs-Motorola-Droid#.VO2sSfmUdqU

10. Nexus One My Touch Droid iPhone 3Gs
Launch Date Jan 5, 2010 Aug 5, 2009 Nov 5, 2009 June 16, 2009
Countries 1 1 1 8
Generation 1st 1st 1st 3rd
Installed Base 0 0 0 27 million
Week 1 Sales 20,000 60,000 250,000 1,600,000
Source: Farago, P. (2014). Flurry Special Report: Google Nexus One Launch Week Sales.
[online] Flurry.com. Available at: http://www.flurry.com/bid/29658/Flurry-Special-Report-Google-
Nexus-One-Launch-Week-Sales#.VIiHxzGUdqU

11. HTC
Motorola
Sony
Ericsson
Samsung
Others
HTC
Motorola
Samsung
LG
Sony
Ericsson
Others
20102009
Android Market Share by OEM
Source: Farago, P. (2014). Android Special Report: Is Samdroid the new Wintel?. [online]
Flurry.com. Available at: http://www.flurry.com/bid/54035/Android-Special-Report-Is-
Samdroid-the-new-Wintel#.VO2s5PmUdqU

12. NEXUS S
 Partner OEM: Samsung Electronics
 Launch: December, 2010
 Price: Contract - $199 (T-Mobile, Sprint)
Full Retail - $529(3G), $555(4G)
Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for the
Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

13. SWOT FOR NEXUS S
Strengths
• New and improved representative of
Google’s own Android series
• Sudden growth in the android
industry
• No bloatware
• Samsung increased it’s market share
Opportunities
• Samsung was continuing to grow
it’s market share
• The smartphone industry had
started to grow
Weakness
• Did not satisfy consumer’s demands
• Highly priced
• Lack of marketing lead to lack of
awareness
Threats
• Apple recently launched an improved
version of the iPhone 3

14. GALAXY NEXUS
 Partner OEM: Samsung Electronics
 Launch: November, 2011
 Price: Contract - $199.99(LTE; Sprint)
Full Retail - $399(GSM), $699(LTE)
Google Play - $399(GSM)
Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for the
Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

15. Top 10 Android Devices (Global)
Samsung Galaxy S3
Samsung Galaxy S2
Xiaomi Mi 1S
Samsung Galaxy Note
Samsung Galaxy Note 2
Samsung Galaxy Tab 2
Nexus 7
Htc One X
Galaxy Nexus
Sony Xperia S
Others
Source: Steineman, K. (2014). Android Market Share – Leaning towards Galaxy S III and
Nexus 7. [online] Mobile Minute. Available at: http://mobileminute.info/android-market-share-
leaning-towards-galaxy-s-iii-and-nexus-7/

16. Source: Steineman, K. (2014). Android Market Share – Leaning towards Galaxy S III and
Nexus 7. [online] Mobile Minute. Available at: http://mobileminute.info/android-market-share-
leaning-towards-galaxy-s-iii-and-nexus-7/

17. NEXUS 4
 Partner OEM: LG Corporation
 Launch: November, 2012
 Prices: Contract - $199 (T-Mobile)
Full Retail - $499 (T-Mobile)
Google Play - $299 (8GB), $349 (16GB)
 Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for
the Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

18. PENETRATIVE PRICING STRATEGY
0
100
200
300
400
500
600
700
iPhone 5 Samsung
Galaxy S3
Google Nexus
4
Production Cost ($)
Launch Price ($)
These are approximate
Smith, C. (2014). Awesome interactive chart shows the cost of building every iPhone and
Galaxy phone. [online] BGR. Available at: http://bgr.com/2014/12/05/iphone-6-vs-galaxy-
s5-price/

19. NEXUS 5
 Partner OEM: LG Corporation
 Launch: October, 2013
 Price: Contract - $149 (Sprint)
Full Retail - $449 (T-mobile, Sprint)
Google Play - $349 (16GB), $399 (32GB)
 Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for
the Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

20. PRICING & PRODUCT STRATEGY: IMPACT OF NEXUS 5
 Penetrative pricing strategy - a winner
 Considered as the highest commercial point of the
Nexus series
 "Nexus 5 has been a very strong performer for
Google" - Patrick Pichette, CFO, Google, Inc.
 Noticeably strong contributor to Google's Q4 2013
revenue of $16.86 billion as compared to $14.4
billion in Q4 2012
 Although a success for LG Corp. as well, the Nexus
5 failed to prevent them from posting a loss of
$59.1 million in Q4 2013, completely reversing the
previous year's profit of $205.8 million
Source: Cheng, R. (2014). LG swings to Q4 loss, but G2 and Nexus 5 drive phone sales - CNET.
[online] CNET. Available at: http://www.cnet.com/news/lg-swings-to-q4-loss-but-g2-and-nexus-5-
drive-phone-sales/

21. NEXUS 6
 Partner OEM: Motorola Mobility
 Launch: November, 2014
 Price: Contract - $0-299 (All major US carriers)
Full Retail - $649 (32GB), $699 (64GB)
Google Play - $649 (32GB), $699 (64GB)
 Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for
the Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

22. WHY DID NEXUS GO PREMIUM?

23.  May, 2012 - Google, Inc. purchases Motorola
Mobility for $12.5 billion
 October, 2014 - Google, Inc. sells Motorola Mobility
to Lenovo Group Ltd. for $2.91 billion
 November, 2014 - Nexus 6 is released for $649
(32GB)
 Google incurred a loss of $1.245 billion in the fiscal
year of 2013 alone caused by Motorola
 Google acquired most of Motorola Mobility's patents
before its sale to Lenovo Group Ltd.
 Since Nexus 6 was the last Google phone
manufactured by Motorola, no option other than
changing their strategies and policies was left at
Google's disposal
Sources:
• Investor.google.com, (2014). Google to Acquire Motorola Mobility – Investor Relations –
Google. [online] Available at: http://investor.google.com/releases/2011/0815.html
• News.lenovo.com, (2014). Lenovo Newsroom | Lenovo to Acquire Motorola Mobility from
Google. [online] Available at: http://news.lenovo.com/article_display.cfm?article_id=1768

24. PRODUCT & PRICING STRATEGY: DYNAMIC
CHANGE
 Nexus 6 - First Nexus phone available through all 5
major US carriers, besides being sold unlocked
 Decision to reap in more profits from the get go
 Premium price for a premium phone
 Adopted the 'Price Skimming' strategy
 Manufacturer pressure
 Change in marketing - going traditionalCarrier
concessions
Source: Devine, R. (2014). Nexus 6 set for all the major U.S. carriers. [online] Android Central.
Available at: http://www.androidcentral.com/nexus-6-set-all-major-us-carriers

25.  Source: Barranger, K. (2014). History of Nexus Phone Pricing – Why the High Price for
the Nexus 6? | Droid Life. [online] Droid-life.com. Available at: http://www.droid-
life.com/2014/10/16/nexus-6-price/

26. CONCLUSION
 The Nexus smartphone line saw a switch from price
skimming to penetration pricing, which then
switched back to skimming with a product justifying
that move
 Segmentation Stages: Android Aficionados-->Wide
Consumer Base-->Lower Segment Consumers--
>Premium Segment Consumers
 The Nexus series has witnessed relatively less
success than Samsung and Apple's flagship
smartphones, but has proven to be a great brand
representative for Android and Google

27. REFERENCES: BOOKS
 Hoang, P. (2007). Business & management. [Melton,
Vic.]: IBID Press.
 Kapferer, J. (1994). Strategic brand management. New
York: Free Press.
 Kotler, P. (1980). Marketing management. Englewood
Cliffs, N.J.: Prentice-Hall.
 Kotler, P. and Armstrong, G. (1991). Principles of
marketing. Englewood Cliffs, N.J.: Prentice Hall.
 Woyke, E. (n.d.). The smartphone.

28. JOURNALS
 Aaker, D. (1996). Misconceptions about brands. J Brand
Manag, 3(4), pp.212-214.
 Bansal, R. and A., Y. (n.d.). The Asset Pricing-Macro Nexus
and Return-Cash Flow Predictability.SSRN Journal.
 Barazza, S. (2012). Apple v Samsung: a preliminary injunction
against the Galaxy Nexus smartphone.Journal of Intellectual
Property Law & Practice, 8(1), pp.6-8.
 Hecht, J. (2014). All smart, no phone. IEEE Spectr., 51(10),
pp.36-41.
 The Teardown: 4G Samsung Galaxy Attain.
(2012). Engineering & Technology, 7(10), pp.94-95.

29. WEBSITES
 Barranger, K. (2014). History of Nexus Phone Pricing – Why the High
Price for the Nexus 6? | Droid Life. [online] Droid-life.com. Available at:
http://www.droid-life.com/2014/10/16/nexus-6-price/
 Cheng, R. (2013). Here's why T-Mobile's Nexus 5 is $100 more than at
Google Play - CNET. [online] CNET. Available at:
http://www.cnet.com/news/heres-why-t-mobiles-nexus-5-is-100-more-
than-at-google-play/
 Cheng, R. (2014). Google's Android VP on why a pricier Nexus 6 may
lead to higher sales - CNET. [online] CNET. Available at:
http://www.cnet.com/news/googles-android-vp-on-why-a-pricier-nexus-6-
may-lead-to-higher-sales/
 Cheng, R. (2014). LG swings to Q4 loss, but G2 and Nexus 5 drive
phone sales - CNET. [online] CNET. Available at:
http://www.cnet.com/news/lg-swings-to-q4-loss-but-g2-and-nexus-5-
drive-phone-sales/

30.  Farago, P. (2014). Flurry Special Report: Google Nexus One
Launch Week Sales. [online] Flurry.com. Available at:
http://www.flurry.com/bid/29658/Flurry-Special-Report-Google-
Nexus-One-Launch-Week-Sales#.VIiHxzGUdqU
 Goldstein, P. (2014). Report: Google to expand Nexus device
program to multiple OEMs. [online] FierceWireless. Available at:
http://www.fiercewireless.com/story/report-google-expand-nexus-
device-program-multiple-oems/2012-05-16
 Graham, F. (2010). Google Nexus One review - CNET. [online]
CNET. Available at: http://www.cnet.com/uk/products/google-
nexus-one/
 Welch, C. (2012). Official: T-Mobile to sell Nexus 4 for $499 off-
contract, available in 'select' stores. [online] The Verge. Available
at: http://www.theverge.com/2012/11/13/3642382/t-mobile-nexus-
4-to-cost-499-unsubsidized