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Summary:

To meet cost, Ting is selling the Nexus 5 for $96 more than it costs through Google Play. The MVNO wants you to connect a Nexus to its network. It just would rather you purchase it from Google.

Nexus 5 Google Now

Virtual network operator Ting just made a very odd product launch. On Monday, it began selling the Nexus 5 smartphone to its customers, but on its blog Ting implored its customers not to buy the phone through the company’s website. Instead, Ting is asking customers to buy it directly from Google at the Play store.

Not only will Ting charge you more if you buy the phone from its online store ($445, compared to $349 through Google), it only offers the device in one of its three colors (black). You’re much better off just buying a $10 SIM card from Ting and then activating your Nexus 5 after Google ships it in in the mail.

Ting illustration MVNO

The blog post shows the weird dynamics at work when it comes to the way that Google promotes its line of Android flagship devices. Ting says it’s actually selling the phone below cost even at $445, meaning it’s losing money on every sale. While other carriers are selling the LG-manufactured phone for around $150, they’re doing so through contract subsidies, making back the device’s costs through hidden charges in their monthly bills.

What this goes to show is that at $349, Google is pricing the Nexus 5 much lower than it should be. While we don’t know if it’s actually losing money on every smartphone sold, it’s certainly not making any money. Google is basically subsidizing the device.

Why? Sure, Google wants to get its Nexus devices into the hands of as many customers as possible, but it could do that through the carriers. By selling the device more cheaply on Google Play, it could be challenging the long-held notion in the U.S. that carriers are the source of our smartphones. The idea is that you should be able to buy your device and then pick the carrier you connect it to. Right now that choice is limited to Sprint, T-Mobile and their mobile virtual network operators, and Ting just happens to be a Sprint MVNO.

Ting has no problem with that philosophy. Because the company doesn’t have contracts, it’s more interested in selling you a voice and data plan than an actual device. It started supporting the Nexus 5 back in November through SIM cards, and since then the Nexus has become one of the most popular devices on its network. Ting said it only started selling it directly because of customer demand, but as it points out, you can get a much better deal on the Nexus 5 elsewhere.

  1. What is Ting’s value prop? Do they sell prepaid service for less $ than Sprint?

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    1. With Ting you only pay for the megabytes, messages and minutes that you actually use (all billed separately). The more you use, the better our rates get (as opposed to getting penalized by overage charges if you go over a typical plan with the big carriers). If you check out the Savings Calculator (ting.com/calculator), you can compare your current plan to Ting and see how much you’d be saving. About 98% of people would save money with Ting!

      - Sarah
      Ting

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      1. I’m in the 2% according to your calculator. Oh well

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  2. Hardware costs are falling, whilst hardware longevity & functionality are on the increase. In this sense, new models like the Nexus 5 are more valuable to consumers than their predecessors, yet (in general) they cost less!
    Lower h/w costs + better performance & longevity mean that 24-month contracts are less appealing for consumers who can afford the upfront costs and then pick & choose their carrier. They also provide an opportunity for manufacturers/designers to assert their brands, and so , develop long term brand loyalty in the marketplace.
    Major carriers will be squeezed by this – the contract model has made money for them – and they are being pinched on the service delivery side by MVNOs, who , in this case , don’t even want to sell phones.

    This consumer was mugged once too often by a major carrier – so the trend is to be welcomed. There is a downside for the consumer somewhere here, but it will need to be pretty severe to compete with the downside of a 2-month contract!

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    1. uhhh 24-month contract!

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    2. All great points, Fox Trot. I should have let you write this post :)

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    3. Longevity of the device is one thing, screen cracks VERY easily.

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  3. I can tell you what’s better, everything ! The iphone 5s for me as always been a very nice telephone and look how bad looks in the comparison !! http://versus.com/es/google-nexus-5-vs-apple-iphone-5s

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  4. The new Sony Xperia Z1 is the phone for me, great screen quality, water proof
    fantastic

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