Fixing Nexus supply problems is Google’s new priority

nexus4-ceThe botched Nexus 4 launch has already turned into a rather embarrassing episode for Google, but Larry Page is trying to reassure investors and analysts, although it could be too little, too late.

Page mentioned the problems during Google’s Q4 earnings report, but he did not say much and he did not provide any new details.

“Clearly there’s work to be done managing our supply better, and that is priority to our teams,” said Page, according to Android Community.

This comes across as an understatement, as the Nexus 4 launched back in November, yet it is still practically impossible to actually buy one in most markets. Supply problems are also affecting the Nexus 10 tablet, built by Samsung, and to a lesser extent, the Nexus 7, nee Asus.

The Nexus 4 is the black sheep of the family. It was supposed to sell for $299/$349 at Google’s Play Store, no strings attached, but extremely low stock numbers prevented it from making much of an impact on the market. Back in December, sales were estimated at just 400,000 units and some analysts believe Google misjudged demand by a factor of ten. So far LG’s and Google’s response is limited to blaming each other in interviews, which is not what consumers and analysts want to hear at this point.

Google apparently estimated demand for the new phone based on Nexus S and Galaxy Nexus launch sales, which sounds pretty naïve given the hype surrounding the Nexus 4 and its world-beating price tag. It is a puzzling gaffe on Google’s part, but it probably played into the hands of Android handset makers like Samsung and, to some extent, Apple.

Nexus gear was never supposed to be a cash cow for Google, due to tight margins and relatively low volumes, but some retailers and distributors are trying to cash in on the shortage, by charging obscene premiums for the few Nexus 4 phones in the channel. Instead of growing the brand.  The practice is frustrating people and having the exactly opposite effect.

What’s more, even if Google and LG manage to step up shipments in coming weeks, it could be too late. The Mobile World Congress is just around the corner and the Nexus 4 will be overshadowed by next-generation Android flagships, with 1080p screens and A15 quad-core SoCs.