Is Google paving the way for decent cheaper smartphones?

Anna Scantlin
Contributing Editor from Kansas City, MO
Published: November 15, 2013

Smartphones are expensive. You might not realize they're that expensive if you're with carriers like Sprint, Verizon or AT&T, because the big shiny price that you see underneath that new iPhone or Galaxy S device probably says something along the lines of $200 or less. Low-end and older devices might even have the tempting price of "FREE" written in what's likely to be bold, capital letters underneath. Looks good, doesn't it? But make no mistake, that teensy, tiny print underneath that big bold price is going to tell you what's really going on with that price. That "FREE" or $100 phone you're looking at probaby cost at least $400 or more, and that's on a good day. If it's too good to be true, it probably is. With these carriers you can bet your bottom dollar that those prices you're looking at are bonafied subsidized pricing, and although it might not come with a hefty price tag right out the door you'll end up paying for the entire price of the device (and then some) within the next 24 months. 

Like I said, smartphones are expensive.

You wouldn't think they would be that expensive. You keep hearing that they're just like computers in your pocket, but they're so much smaller than computers. Why do they cost so much? Supply and demand. People want them, so it's easy for manufacturers to jack up the price. A 16GB Apple iPhone 5s costs Apple $213 in materials to make, but the retail price of the phone without a subsidized 2-year contract will run you $649. But they have a business to run, and if people are willing to pay that much money for an iPhone 5s why not sell it for that price? I already know at least 3 people who have bought the iPhone 5s at full retail price, simply because they didn't want to be locked into a contract. Who can really blame them? For some, paying a hefty chunk of money from the start is worth more than possibly paying for monthly service, plus the phone, plus cancellation fees later down the line. And it's been that way for a while. If you wanted to save yourself from being locked into a contract but wanted a flagship phone, you would have to put down a considerable amount of money; either that or wait a few years for the price to go down, at which point said flagship would be outdated. 

But it's not always like that anymore. Recently we've seen a push from Google to release phones with flagship specs but at a cheap price. The Galaxy Nexus was the first phone to go on sale for "cheaper than normal" in the Google Play Store, with the 16GB model selling for $399. Expensive, yes, but not as expensive as it would cost you to buy other models on the same level as the Galaxy Nexus at the time. Google continued this trend the following year by coming out with the Nexus 4, which was decent in specs and cost $100 less with the device being priced at just $299 for the 16GB model. And of course, now we're here with the Nexus 5. Almost all of the Nexus 5 is in direct competition with current flagship models, yet the price is a mere $349 for the 16GB model. 

However, the Nexus line is just one line of phones. And not everybody wants a Nexus phone, despite the fact that it's cheaper than most phones off contract. But Google has one more trick up its sleeve, even if you're not a Nexus fan: Motorola.

Motorola, acquired by Google in 2011, was once famous for its Droid line of phones. In fact, the Droid name is still pretty famous today thanks to a large amount of confused consumers ("Hey, is that a Droid you're carrying?" "No, it's a Samsung Galaxy S 4." "Yeah, but that runs on Droid, right?")  Although Droids are still around, they've taken a side step out of the limelight in favor of phones from manufacturers like Samsung, LG and HTC. Honestly, it had been a good minute before I had even given Motorola a second thought. Before this year, the last time I paid any attention to Motorola was for the Photon, which was one of the better 4G phones out on Sprint at the time. But that was back in 2011. Since then, I haven't really cared.

Until the Moto X came out. Moto X had been rumored for a long time to be the "phone to end all phones", as we dreamed about flagship specs and a cheap, cheap price tag off of contract. This seemed like the ways of Google, and by joining forces with Motorola it seemed that the idea couldn't fail. Really, it was just that the idea wouldn't die. People kept feeding fuel to the fire - for months and months. We kept building up on this marvelous idea of a phone and nobody was hearing a real, official peep about it. Finally, Google and Motorola started teasing some hints. Then the fire exploded - this is it, this is that phone we've been waiting for. Then they released the Moto X at just about the same price as any other flagship on the market at the time. Total disappointment. We can only blame ourselves for it, really, but... yeah, so that happened.

Initially, anyway. Looking at the price of the Moto X today, in some places you might not know that at one point in time it served as one of the biggest disappointments to mobile fans everywhere. Carriers are lowering the full price of the phone, not to mention the subsidized price. You can even purchase a Moto X for just $299 from Republic Wireless, a Sprint MVNO - no contract included. But what's even more important is the arrival of the Moto G, a quad-core phone that targets even more budget-conscious consumers by costing $179. It doesn't have 4G, and it might only have a 5-megapixel camera, but aside from that the specs and the build of the device are a lot better than most Android phones that will run you the same price. 

It seems very "Google-ish" to release phones with a cheaper price than people could otherwise expect them to be. It's a bold move, a good move - not everybody can afford the high prices that smartphones come with. Even some low-end devices will run you upwards of $300 full price and without contract. But with the release of both the Nexus 5 and the Moto G, I do wonder if this extended push for lower-priced devices will end up influencing other companies to start doing the same. I can imagine a cheap but decent handset from Samsung or HTC would be able to sell about as well, if not better. I suppose only time will tell at this point.

Readers, do you hope to see more cheap (but decent) handsets released in the future? Do you plan on picking up a Nexus 5 or a Moto G? Let us know your thoughts in the comments below!

Images via Digital Trends, Motorola