While the Nexus 5 is available for $349 in the Play Store, it costs a whopping $699 at full retail for some markets like Australia. In the United States, T-Mobile is selling it for $449 without a contract. You are probably wondering why is there such a dispersion among the Play Store and full retail prices. Well, LG reached out to Australian site Delimiter to explain. Since the Play Store is run by Google, they have the right to choose the price. Other retailers and carriers such as T-Mobile also have the right to choose the price. The price hike can be explained by the cost of running a “physical store location.” Google does not need a middle man and they clearly have the cash flow to lower the price on products. And markets like Australia have a “tax” because of the cost to get a product there.
Hit the break for LG’s statement.
“Nexus 5 handsets sold through the Play Store are done so by Google and are subject to pricing decisions made by Google.
Offline and retail sales through local Australian retail outlets and sales channels are the subject of a completely separate pricing structure that provides for a different support and service model for consumers.
To this end, this provides for a range of different cost elements, including transport and logistics, local service and support costs associated with retail sales staff, physical stores, live sample devices for demonstration, and many other services functions that consumers can access when a device is purchased at a physical store location.”