Google cuts Nexus 4 price by up to a third in some key markets

Competition is heating up in the smartphone market ahead of Apple's next iPhone launch

Google has cut the price of the Nexus 4 in handful of countries including the U.K. and the U.S., where the smartphone now costs from $199. The aggressive drop signals Google wanting to preempt the arrival of a cheaper iPhone.

The price drop comes at an interesting time for the smartphone market. Google-owned Motorola's comeback device the Moto X has just gone on sale in the U.S. and Apple is expected to launch new phones in less than two weeks.

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"Google is keen to put the pressure on Apple ahead of the launch of a new cheaper iPhone model. It wants to get ahead of the hype," said Ben Wood, director of research at CCS Insight.

Francisco Jeronimo, research director IDC, agreed.

"[Apple's launch] likely contributed to the timing. Vendors usually cut the price of their phones after a couple of quarters," he said.

At the same time, the price cut also puts pressure on other makers of Android-based devices, including struggling HTC and Motorola. Staying competitive in the smartphone market while getting on with its partners is a delicate balancing act for Google, according to Wood.

In addition to the U.S. and U.K., Google has also cut the price of the Nexus 4 in Australia, Canada, France, Germany, Spain and South Korea. The smartphone now costs from £159 in the U.K. and €199 in France, down from £239 and €299.

The Nexus 4 was announced in October last year. It has a 4.7-inch screen with a 1280 x 738 pixel resolution. Under the hood, the device has 2GB of RAM and either 8GB or 16GB of integrated storage.

"It hasn't made the impact I expected, but the Nexus smartphones have always attracted the geekier end of the market, while average consumers gravitate towards the more well known brands," Wood said.

In the beginning the Nexus 4 was plagued by a lack of stock, which led to a war of words between Google and its manufacturer, LG Electronics. Price cuts usually also signal the imminent arrival of a new model, and a new Nexus smartphone with LTE should arrive soon, according to Jeronimo.

On Wednesday, the new Nexus 7 became also available outside the U.S. The tablet's main feature is an upgraded 7-inch screen which has a 1920 x 1200 pixel resolution.

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