1. Alienate the geeks.
The technophiles are the ones that drive the nexus sales. They were the ones so eager for this phone, and they were the most disappointed when the specs were revealed. (Especially the screen specs.) They are disappointed the first versions of this phone will with have carrier bloat ware, as well.
They will prob stick with the nexus.
2. Alienate the layman
The average mobile user buys a phone from a brick-and-mortar store. They still do not go online for it. 'design by you' becomes irrelevant. (Although some may like the overall design and finish of the phone.)
If they buy this phone at the carrier store, for $199 due to carrier 'salesmanship', they just got suckered because the value proposition between the S4 or even other recent high-end Moto Droids simply can not compare.
Also, the average user barely uses Google Now or Siri. The new 'always listening' feature will freak them out. (Despite the feature being local to the phone, there is little trust from the average user.)
3. Alienate the high-end user
The high-end user, who are now acclimated to retina quality display, and the benefits of higher specs will most likely not downgrade, at the same price point. The assumed informed user knows better.
4. Alienate the low-end user
Low-end user wants free or $99. They aren't going to spend $199 for it. iPhone is a case study toward this behavior.
Google is rumored to be putting $500million of marketing muscle behind the phone, so it may very well find an audience. But based on the current info around the business, alienation seems likely.
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