It might not be the primary thing driving the cutthroat price competition, but it does make sense for Google to want the carrier model disrupted. Currently, the

It might not be the primary thing driving the cutthroat price competition, but it does make sense for Google to want the carrier model disrupted. Currently, they are on the short end of a massive power imbalance that puts them at a competitive disadvantage against iPhone. (Just read John Gruber's gleeful posts deriding the (admittedly astonishing) lack of high-speed data on the Nexus 4.) In fact, Google has been gunning for this disruption since the very first Nexus One. Remember, they introduced that phone -- their first -- unlocked and unsubsidized, with direct-to-consumer sales. At the time, that was a novel approach (and really exciting for knowledgeable consumers). However, they got their ass beat down by the carriers and had to whimper back home with their tail between their legs. They even stopped selling phones direct for a time. So they failed at subverting the carrier's (anticompetitive, illogical, anti-consumer) business model the first time they tried, but you can bet they still want to. Apple actually does, too, for similar reason, but Apple didn't underestimate the power of the carriers, and waited until they had the most dominant phone in human history and the leverage that came along with to make the carriers lay down and take it however Apple deigns to give it to them. Google would love to be in a similar position, but they won't be until either Google can make a phone close to the iPhone in popularity, or the carrier-subsidy model goes away or is at least greatly diminished (neither thing being very likely in the foreseeable future).