I don 't understand how smartphones can be sold at like $700 when the Nexus 7 is a mere $230

[G+_Benjamin Deming]

I don't understand how smartphones can be sold at like $700 when the Nexus 7 is a mere $230. How can they get away with this?

[G+_Fernando De Leon]

Because for some companies that's the primary way of getting money

Others have services that are baked in the device and their source of income is that

[G+_Jeff Ratte]

But more than doubling the actual value in many cases? Seems over the top.

[G+_Harvey Smith]

Also the N7 didn't need the cell data antennae/electrics and cut a bunch of other corners (plastic case, no rear facing camera, crappy front facing camera, crappy sound.. well though I'm talking 2012 model as that's the one I have;) .. anyway.. plus making money on the services is the end goal, not the hardware, as mentioned.

[G+_Gregory Soave]

Also, they have to put everything in a much smaller package.  

[G+_John Mink]

Gregory Soave nexus 4 want much more expensive... Nowhere near $700

[G+_Mark Scholes]

All smartphones cost about $200 to make, but as most people don't see the $600 sale price they don't complain

[G+_Lucas Nichols]

It's basic economics. Supply and demand.

[G+_Jagannath Moorthy]

It's the BOM which is 200,you need to add the cost of development, marketing, overheads and the retailers margin to it. The fact that companies other than Samsung are not making much profit even worth their phones priced at 60 0-700$ tells you everything you need to know.

[G+_Mark Scholes]

Google's marketing is putting a new phone on their website for 5 mins, and selling directly to avoid retailer margins. The development is the question, but they're not making the chips, or OS, so it's case design, integration, and testing, which can't be that much when they make stupid special edition phones which are slightly larger and have a fingerprint reader added

[G+_Robert Marshall]

But look at the flip side. MOST people are getting subsidized phones. Got to pay for the subsidy somehow. I don't factor the contracts in because everyone is going to pay a month subscription fee, whether it's on a long-term contract or on a month-to-month basis. 

 

If you want to see a real racket, look at the new plans designed so you can update to a new device any time you want to. With the fee structure some devices are costing a user twice (if not more) what it would cost them under normal circumstances.

 

Makes me glad I bought an unsubsidized HTC One through Swappa.com

[G+_Mark Scholes]

Many people don't have contracts, I pay about $10/ year for my phone

[G+_Robert Marshall]

I guess it depends on which side of the Atlantic you're on them Mark Scholes. I would suggest that here in the USA, most people are on contract. 

 

To keep it in context, what kind of a phone are you paying $10/mth for, and what's your monthly cost for connectivity?

[G+_Mark Scholes]

Well yes, someone managed to trick you into paying to receive calls, whoever that was was a genius. I bought my phone off ebay, hardly make any calls, except via SIP, and use the free wifi that's everywhere. $10/year, not /month