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LG says Google to blame for Nexus 4 shortages

Popular handset still in short supply, with LG saying its partner forecast inaccurately, while Google says Korean firm is "erratic"


Published: 21 January, 2013

READ MORE: LG Electronics | Google | Handset | Android

The war of words between Google and LG continues, with each blaming the other for continuing shortages of their co-branded Nexus 4 handset.

In mid-December, Google apologized to customers for non-availability of the Android smartphone and put the blame on its newest hardware partner's "erratic" supplies. This week, LG turned the tables, saying Google misjudged demand.

The Korean firm needs a hit handset to help it win market share in a sector increasingly dominated by Apple and Samsung. It says it is now ramping up production of the Nexus 4, but its director of mobile communications in France, Cathy Robin, told local website Challenges that the supply problems have been down to Google's miscalculations. The Nexus 4, with an unsubsidized price of $299, certainly targets a wider base than previous Nexus models, but Robin claims Google based its forecasts on experience with previous devices.

It certainly could have expected the smartphone to be a strong seller, given its high specification list at that price point - a Qualcomm Snapdragon S4 Pro processor, Android Jelly Bean and a trademark LG bright screen.

Many observers think the $299 price tag has been achieved with heavy subsidies from Google, as it moves from positioning Nexus mainly as a developer showcase or premium product, to chasing the mass market. If so, this would see Google, like Amazon, changing the rules of the mobile device game, because these firms make their profits from advertising or media sales, not hardware per se. That will create future challenges for the device makers themselves, already under huge margin pressure. However, if Google - like Microsoft - does plan to subsidize its key partners' gadgets in order to gain share, it needs to get its forecasting right.

In December, Google's managing director for the UK and Ireland, Dan Cobley, in a Q&A with users on Google+, said LG was to blame for the shortages which have afflicted Nexus 4 since its November launch. He wrote: "Dear all, I know that what you are going through is unacceptable, and we are all working through the nights and weekends to resolve this issue. Supplies from the manufacturer are scarce and erratic, and our communication has been flawed. I can offer an unreserved apology for our service and communication failures in this process."

The fractious relationship will be a blow to LG, which has been included in Google's inner circle for the first time, an important symbolic step forward in its bid to come out of the shadow of Samsung - the most regular provider of Nexus devices, although others have come from HTC and Asus. Google is expected to widen the circle next year, and possibly include its own handset unit, Motorola Mobility.

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