It just made sense. The timing would have been impeccable. They exposed a huge demand for a subsidized device with the N4. Rumors of the N5. Then the exposure of the Moto X and it's potential to fill the void of the missing N5. The market is shifting and the flagships of yore will be relics of the past soon, the singularity is within view so there's no justification to have 9GB of RAM or 37 core chips, the benefits simply are not there with current battery technology. With mid to high end sets pushing into the market from no name companies like Huawei offering similar experience for half the price, it's a no brainier to be more budget conscious at this point. The smartphone market is losing momentum very quickly, and the reasoning behind a $600 phone is no longer there. Mid tier phones are selling world wide at blistering
pace but these big blockbuster phones are waning. That's why we're seeing a model of build a phone then build a "mini" replica just to keep the sales up.
It's sort of how the PC market went, all PC's were expensive as hell, then the market became flooded with a hundred companies fighting for the budget PC market. Sure you
can pay thousands of dollars for an Alienware gaming PC, but is it worth it for everyone to buy one? Hell no. I predict over the next 2 years the swing away from these uber devices
will fade away giving life to new, truly innovative ideas instead of spec bumps AT A GREAT PRICE LIKE SHOULD HAVE BEEN DONE HERE AND NOW, and personally I can't wait.
Google had they offered to eat the overhead as they did with the N4 could have launched the most successful android device of all time, with no doubt from me at all. Word of mouth alone that there exist a phone that you don't have to buy through a carrier subsidy and contract at an affordable price would have been headline news. The prospects are enormous, but instead of letting the device sell it's self the way it should they've instead marked it up and are throwing $500 million in marketing at it to force it to sell as everything else.
Someone out there is going to get this model right, and when they do they will dominate the market the likes of which have only been seen by Apple with the original iPhone.