The Nexus 4 issues: LG finally explains itself

LG finally accepted to deliver the truth about the case of the Nexus 4, the smartphone that is produced by the giant korean company for Google and that has ignited the Web since its launch in November. And for good reason. It's unobtainable. (Read the review)

Back to the facts. The smartphone, released on the GooglePlay.com online store on the 13th of November, faces a very large demand. It immediately went out of stock after a few hours in several countries. And since then the buyers hit a brick wall by seeing an unchanging "sold out" next to the two offered devices (8GB and 16GB). Since December, SFR offers the much talked about phone with contract. Without contract, it shows a prohibitive price: €629.90 against €349 on the Google Play Store.

The rumors go wild on the Internet: production limited on purpose by LG and Google in order to create a deliberate shortage and a buzz; production halted by the korean giant in order to favor a new model, sales at a loss by Google…

For Challenges.fr, Cathy Robin, director of LG France's Mobile Communication division, reviews the situation.

What's happening with the Nexus 4, a very competitive but unavailable product?

- The Nexus 4 indeed offers an excellent technical specs/price ratio. The stock issues aren't complety related to LG. Google submitted us some sales predictions calculated from their sales history for the previous Nexus. However they were lower than the actual demand. The current shipments from LG to Google match what had been preordered on the Google Play site. We still ship them regularly. But it's "just-in-time". That's why the Nexus 4 is always shown as sold out and the potential buyers have the feeling they can't buy it.
As an example, the initial predictions of Google were 10 times higher for the United Kingdom and for Germany. So we ship a lot more to these countries than to France. There was a happy medium that was badly anticipated. But mind that I'm not blaming anyone. Between Google and LG, everything is going smoothly. Today, if we want to increase the shipments pace, there will be a 6-week delay.

Is the announced figure of 375,000 produced smartphones correct?

I don't know that figure but in any case it's a lot lower than the actual figure.

Is the Nexus 4 sold at a loss, as it has been said?

We have no incentive to sell it at a loss. However there was an agreement between Google and LG to sell it at a very compelling price. And it's true that €299 for the 8GB and €349 for the 16GB, that's a super attractive price.

But SFR offers it without contract for €629.90…

I can't really answer for them, but I imagine that SFR's goal is to sell products with contracts.

Is the Nexus 4 production going to stop?

LG refuted this information [rumors said that the korean group planned to stop the production]. The Nexus 4 is not stopping. On the contrary, the pace will increase. Starting mid-February, there will no longer be any tension in the market.

Can the Nexus 4 overshadow the Optimus G, the new spearhead of the brand?

It won't overshadow the Optimus G which regroups the best of LG's technology [Qualcomm Snapdragon S4 Pro quad-core processor at 1.5 GHz, 4.7" 1280x768 screen, 4G LTE, 13 MP camera…]. It admittedly shares a common base with the Nexus 4, but it concentrates the very best. It will be in stores (in France) in March. In particular, it possesses the QSlide functionality that allows it to display two different screens simultaneously, the QuickMemo functionality that makes it possible to write notes and share them immediately. I can compose a number while keeping the note displayed. It also possesses live zooming that makes it possible to zoom in during video playback… In any case we want to make both the Nexus 4 and the G successful.

In terms of sales, what are your objectives for the Optimus G?

The Optimus G was released two months ago in Korea, Japan and the USA. We shipped 1 million. The goal is to sell a lot of them and come close to the market leaders.

LG released many products (the 4X HD, the Vu, the Nexus 4, the G) giving the feeling that the group totally lacks visibility. What is your strategy?

We went through a difficult phase with ups and downs. So we had to re-establish the base and the fundamentals in order to contend to the top of the market. We have to persuade the consumers that we are back with high quality products. We got back to the reliability, the design and a very good product positioning. It was necessary to gain some market share on the middle-end in order to boost recognition. From now on we are going to highlight our brand with the L series in the middle-end in 3G, the F series in 4G and dual-carrier with affordable prices. There will also be the G series for our top-of-the-line products. We will put an emphasis on the high-end without forgetting the middle-end that is in France supported by Free's arrival in the carrier market. They have just begun listing the L9, that's a good sign for us.

And what about the large-screen market?

We released the Vu that allowed us to test the waters with this 4:3 format and size. It sold very well in Asia where a Vu 2 is planned for release. But it's a niche market. We are not going to persist with this format in Europe. We don't want to spread ourselves thin.

Will LG offer Windows Phone 8-powered smartphones?

We can imagine anything but it's clearly not high-priority. We are very pragmatic.

How is LG doing in the French market?

According to GFK, we have a 6% market share in smartphones. If we only consider the Android-powered ones, we are in 3rd place [behind Samsung and Sony].

What do you see for year 2013?

It will be complicated. The carriers are adapting to Free's offensive. The subsidies will decrease. And then there is the arrival of the 4G, of which we want to be major player. In terms of objectives, we have to at least double our market share. That's ambitious. And if Sony is in an upward trend, so are we.