Can Google’s Nexus phones go mainstream?

Molly Wood Sep 29, 2015

Google announced two new Nexus phones (among other things) Tuesday, but despite some impressive specs and a nice looking version of Android, the company is (mostly) clinging to a pricing model that buyers in the U.S. just don’t seem to want.  

If you want Google’s Project Fi, the experimental (and still invite-only) WiFi-based wireless service Google started offering in April, you can apparently finance a Nexus phone for 24 months. That alone is notable, as it suggests that phone pricing has irrevocably changed. 

But if you don’t want Project Fi, or can’t snag an invite, a Nexus phone can only be bought outright, unlocked, for full price, and will work with most carriers. And while some models have been sold at carrier stores, many—including the new Nexus 5X and Nexus 6P—are only available from Google’s online store.

I was a fan of Google’s pricing plan when the first Nexus devices came out. It’s a clean and simple way to buy phones that circumvent those carrier contracts (which ended up costing double or even triple the price of an unlocked phone). But the plan has always been a tough sell in the U.S., where consumers show a marked preference for buying subsidized phones and avoiding a big up-front cost.  

Now, carriers are slowly getting rid of contracts, and most now let you buy a phone outright but pay for it in monthly installments. So, no device subsidy (which is actually a good thing, since they ended up increasing your bill), but no $650 tab the day you buy your phone, either.

And people are loving it. AT&T reported in April, in fact, that 62 percent of its customers (the ones who don’t use prepaid phone service) are now on plans that offer monthly installment payments, but no contract or device subsidy.

The installment plan option is so appealing, in fact, that Apple just announced its own version, which lets you buy new, unlocked iPhones directly from Apple and upgrade more often. Google would be wise to do that with the Nexus phones, even if you don’t want Project Fi. It might sell a lot more phones.

Then again, perhaps it’s not that surprising, since Google has never seemed that interested in selling Nexus phones in large quantities. The phones are a bit of a mystery, in fact. Each year since 2010, Google has produced a new device that runs the latest version of its Android operating system and at least one or two whiz-bang features (it offered wireless charging back in 2012, for example) and hardly anyone buys it.

Early Nexus devices sold just a few hundred thousand units, and analysts estimated the Nexus 4 sold about three million units. Google doesn’t release sales figures for its phones, so it’s hard to know how the Nexus 5 did, but the best guess is: not very well. In fact, Google admitted outright that sales of its Nexus 6 device had been disappointing. The company blamed constricted supply, but there’s probably another culprit: it was far and away the most expensive Nexus yet.

Nexus phones used to cost around $350 to $400, and the Nexus 5X will start at $379 (but range up to $650). But since the Nexus 6, Google has tried to make the phone a premium offering—in fact, the P in Nexus 6P stands for “premium.” The Nexus 6 started at $650; the 6P starts at a more reasonable $500 but it’s $650 for the top-of-the-line model.

And like the Nexus models before it, I imagine it’ll appeal to a few million Android fans and developers, but not much more than that. And that’s a shame: the Nexus devices are usually well made and and buying a Nexus phone is really the only way to get the latest and greatest version of Android. But it seems the phones are doomed to be yet another Google hobby—a tech showcase, but not a true consumer venture.

Google did introduce a new version of its big consumer hardware hit, though: the Chromecast. The $35 gadget plugs into your TV and lets users wirelessly beam videos from apps like Netflix, HBO Go or YouTube from a phone or tablet to the TV. It’s a competitor to the Apple TV, albeit much cheaper. The Chromecast also got support for Spotify this week, so you can toss music from your phone to your TV’s audio system, and it now supports photo sharing from sites like Facebook and Google Photos.

Or you can opt for a standalone device called Chromecast Audio, which connects any speaker to your phone or tablet. So if you have a whole-home speaker system independent of your TV, you can plug in the Chromecast Audio and stream music from your iPhone, tablet, Android phone or other smart device.

Finally, the company introduced a new convertible tablet called the Pixel C. The tablet starts at $500 and there’s an optional keyboard accessory for $150. It competes with Apple’s just-released iPad Pro, although it’s closer in price to Microsoft’s surprise hit, the Surface 3.

Correction: An earlier version of this story erroneously said the new Nexus phones were only available for full price. They are available with financing if you sign up for Project Fi service. 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.