According to an article posted today on CNET UK, LG tries to explain the stock shortage of the hugely popular Nexus 4 smartphone. The LG-built Nexus 4 went on sale in mid-November, but sold out in half an hour. It was briefly back in stock on Tuesday, but by Wednesday morning the 8GB version was already out of stock again.

This stock shortage resulted in a firestorm that erupted across Google Plus, Twitter, and the entire internet. Loyal Android fans were screaming about how poorly Google handled this launch. Andy Coughlin, the head of mobile at LG UK was asked why he believed Google was running out of the Nexus 4 stock. “As with any sales process, LG supplies product quantities against partners’/customers’ (ie retailers, operators etc) forecasts,” Coughlin explained, going on to say, “demand via the Play Store has been very high in this instance.”

This indicates that perhaps Google underestimated how popular this phone would be and did not forecast a high enough stock level. The phone, which is being sold at $299 for the 8GB version and $349 at 16GB, is offered unlocked and contract free on GSM networks. This is not the first time that Google has sold an unlocked phone at such a low price. Their previous Galaxy Nexus phone was also offered contract free initially at $399 but later lowered to $349.

This raises the question…why didn’t the Galaxy Nexus have the same demand that the Nexus 4 has? Is the Nexus 4 really that much better of a phone? I don’t see it. I mean, it seems really nice and all, but I just don’t see such a drastic difference to require this major demand on the stock levels.

I do have a theory. With Google selling their Nexus phones at such low prices off contract, it’s been reported that they take huge losses on each device they sell. There is simply no way that they can sell these phones at $299 or $349 and cover the cost of the devices. But with this major stock shortage on the Google Play store where else can the phones be found? Why…with the carriers. Do you think that Google is selling these phones to the carriers at the same prices…not likely. The carriers are probably buying them at the standard cost they always pay. The carriers in turn sell the phones at their standard $199 – $249 prices with a 2 year contract. So the stock shortage with the Google Play store drives high demand, with high demand more people are willing to pay the carriers and get locked into a contract just so that can get the phones now. This is the only reason I can see for Google having such low availability for the new Nexus 4.

Like I said, this is just my theory. What about you? Why do you think these Nexus 4 phones are in such high demand?

Image Source – Google Play