I think Google probably knew its target market - Americans tech savy enough to know about locked/unlocked phones and subsidized/unsubsidized prices. That's not

I think Google probably knew its target market - Americans tech savy enough to know about locked/unlocked phones and subsidized/unsubsidized prices. That's not too many people - but to those people the Nexus 4 is incredible value. What I think they didn't anticipate is that there'd be a huge demand world-wide. In other places where phones are sold unsubsidized, coming in with the Nexus4 is like christmas and easter on the same day, unbelievable value, and surely there's a buck to be made selling this phone at a slight markup on those places. The iPhone grey market shows that great numbers will move even if the profit is only $100 per phone.