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Do you have an evidence to back this up? They reduced the price on the Galaxy Nexus in a similar fashion last year, so I assumed this was a normal price reduction.

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As an observer of mobile market, I don't think this is normal price cut. Galaxy Nexus was more reasonably priced, $399 initially, then $349, see http://www.theverge.com/2012/6/27/3120987/galaxy-nexus-hspa-.... There is no chance for Google to make any profit on Nexus 4 at $199, if warranty and customer service cost is factored in. If the product is good, price cut to $249/$299 would be reasonable. There is obviously serious issue to justify such aggressive price cut. NOTE: Microsoft wrote off $900M after Surface price cut.

Regarding Nexus product quality, it is well known problematic. I never saw any Nexus phone with good camera, battery life, wireless reception. The customer service is problematic at best. These problems existed ever since Nexus One.

Yeah. It's not possible that components this year could be cheaper than the year before.

#sarcasm

Cheaper, but not that cheap. Moto X, comparable spec with Nexus 4, has $210-220 Bill of Materials (BOM). Adding cost of sales, warranty, customer service, there is very little margin left, if any.

I wonder if they're trying to sell off remaining inventory before the rumored Nexus 5 later this year.

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