Is Google’s Nexus 4 Too Popular?

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LG could be damaging Google’s (NASDAQ:GOOG) reputation, as the phone manufacturer doesn’t seem to be putting out enough of the popular Nexus 4 smartphones to meet the market’s demands. One of Google’s managing directors, Dan Cobley, has said supplies are “scarce and erratic” when addressing consumers concerned about their ability to get their hands on the powerful smartphone.

Google shares are up 2.14 percent, nonetheless, while LG’s shares are slightly down in the Korean market. The Nexus 4 stands to benefit both companies, as LG makes the device, and the initial release saw the smartphone sold-out in less than half an hour. There is speculation that LG may be favoring its Optimus G device, which could be taking a large share of the components both it and the Nexus 4 require.

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If LG spurns Google, it could lose some support from a powerful ally amid the smartphone war, where all makers are now scrambling for the top spots in the relatively new smartphone manufacturing market. It’s a dangerous move on LG’s part, as it has lost mobile device sales year-on-year for Q3 while Huawei is gaining on LG to take the fifth place seat.

If Google can’t garner priority from phone manufacturers, it could start to lose its influence in the smartphone market.

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