Nexus 5 price

Google has launched the Nexus 5 smartphone at just £299. So why is the Nexus 5 so cheap?

Although the Nexus 5 is more expensive than its predecessor, it's still a great bargain. The Nexus 4 was a draw dropping £239 and although the Nexus 5 is a pound short of £300, it's got double the amount of storage and other upgrades. See also: Nexus 5: Where to buy.

You're probably wondering what the catch is and whether Google is pulling a fast one.

The Nexus 5 is a flagship smartphone and these typically retail for £500-600 so it's understandable that Google's handset might seem too good to be true.

See Apple iWatch, Samsung Galaxy Smart Watch, Google Nexus Smart Watch rumour round-up

Well it's not and there's a key reason for its comparatively budget price. Google's manufacturing partners, like Samsung, HTC and Sony, are exactly that – manufacturers which rely on the sales of devices to make money. However, Google is a software company which also makes a small amount of hardware (with the help of those partners we might add – LG in the case of the Nexus 5).

In this case Google's is happy to make a small profit margin, or even a loss, on its Nexus products if it means that you adopt the Android platform. The idea is that Google goes on to make money from ad revenue, its services and selling content, such as apps, music, films and books, from the Play Store on the device which you got for a great price.

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