Why is Google having trouble keeping up with Nexus 5 demand?

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Back when I started working for Pocketnow, I brought my own HTC-made T-Mobile G1 with me. Shortly thereafter I was sent the Nexus One (also made by HTC) and used that as my daily driver until I replaced it with another HTC device. Over the years I’ve had long-term experience with every single Nexus out there, which is fitting for the type of user that I am: I’m a power user and a developer. Even for tech journalists, devices in the Nexus family were (and arguably still are) the best by which to reference all the different OEM “flavors” of Android.

The Nexus program worked well. Devices were unsubsidized and weren’t locked to any specific carrier. However, they were somewhat “expensive” compared to their carrier-subsidized cousins. This kept the “average Jane and Joe” from buying a Nexus. Primarily die-hard geeks like myself were buying them.

 

The unthinkable

Thanks unthinkable.

Thanks unthinkable.

Then the unthinkable happened.

Google changed what the Nexus was by bumping the specs up almost as high as the über-expensive flagships from the major OEMs, and cutting the price to almost half what the others charged. While the Nexus brand had always been popular with the tech crowd, it hasn’t been a widely popular brand in the consumer market. Once the specs jumped up and the prices came down (compared to the competition), more “regular” people started buying Google’s flagship phone.

Now, instead of a Nexus smartphone being a geek “badge”, it was becoming attractive to the mainstream. All us geeks rejoiced! The Nexus 4 and Nexus 5, phones we’d been carrying and recommending, were finally being purchased by our friends and family.

Previous versions of Nexus phones were never all that easy to come by and would often sell out of stock in minutes. While that’s not surprising of any device (not just Androids) on the day it’s announced, it is somewhat unusual for stock issues to persist after a particular product has had the chance to fill the channel with inventory. But Google’s distribution method isn’t the same as that of most consumer electronics. “Inventory” may be “just-in-time”, rather than “on the shelf”.

Pocketnow’s own Taylor Martin was trying buy a Nexus 5 for himself. For weeks the wait kept getting longer. At the time this article was written, all but the 32GB back version was in stock and ready to ship within 1-2 business days — even the red ones! (At least in these United States.) But that stock comes and goes, and it’s highly likely that at least one of the options will be unavailable to order at any given time.

Is this because of high demand or low supply? Perhaps a little of both.

Supply

I like to think of it as America's attic. — Artie

I like to think of it as America’s attic. — Artie

Though official comments are few and far between, it’s generally accepted that Google is utilizing a “just-in-time” approach to stocking its shelves.

This approach helps keep costs down, but results in inventory fluctuations that can often end up costing a company in both lost sales as well as damaged reputation. Since both of these are generally considered “intangibles”, the “hard costs” of physical inventory versus JIT supply chains typically win-out — with consumers paying the price in frustration, and brand abandonment.

Ironically, Google is working on going away from JIT when it comes to its app runtime (Dalvik vs. ART) because ahead-of-time compilation is arguably much faster and provides a better user experience than just-in-time compilation does. Perhaps Google’s sales division should take the hint from its Android development division.

Demand

If you ask me, we should listen to her demands.

If you ask me, we should listen to her demands.

For a GSM user, any Nexus should work fine on their network. Simply turn off the device, pop in a new SIM, start it back up, and you’re good to go.

Non-GSM versions, those that work with Sprint, Verizon, and other CDMA networks, have typically been available through a separate SKU which contained the “right” hardware to make the device work on the “non-standard” networks. Even when a separate SKU was offered, the result was often terrible, such was the case with the Verizon edition of the Galaxy Nexus. (I just threw up a little in my mouth.) It was so bad, there wasn’t a Verizon-compatible successor to the Galaxy Nexus — not even today.

However, the Nexus 5 brought a happy surprise with it: Sprint support. No, Sprint doesn’t have anywhere close to the number of subscribers that Verizon has, but for once, a customer could buy a phone that works on Sprint as well as all the major GSM networks. I don’t know if that’s a first, but I can’t think of another device that offered the ability before the Nexus 5.

The downside to this meant that customers on another carrier were buying up the phone — our phone! Combine those with everyone who wanted a flagship phone for half the price, and you can get a sense of the Nexus 5 demand.

Your turn

Have you been trying to get your hands on a Nexus 5? Were you met with availability challenges or out of stock messages? Do you live somewhere outside these United States and the Nexus 5 either isn’t available or is too expensive? Head down to the comments and share your Nexus 5 buying experience and frustrations.

Image credit: Warehouse 13

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About The Author
Joe Levi
Joe graduated from Weber State University with two degrees in Information Systems and Technologies. He has carried mobile devices with him for more than a decade, including Apple's Newton, Microsoft's Handheld and Palm Sized PCs, and is Pocketnow's "Android Guy".By day you'll find Joe coding web pages, tweaking for SEO, and leveraging social media to spread the word. By night you'll probably find him writing technology and "prepping" articles, as well as shooting video.Read more about Joe Levi here.