It would be more realistic to compare the iPhone with the Galaxy, which is also sold for profit.
The Nexus 4 is sold at a loss or barely break even, following the same model as Amazon's Kindle line. It's a class of devices sold using a different business model, regardless of Android.
It remains to be seen whether these can be manufactured at scale--it costs to commit to large scale production, which can be seen in LG's inability to deliver Nexus 4 devices at launch. And it is also doubtful that they can remain competitive over time. Other loss making devices such as game consoles don't see frequent hardware revisions.
The Nexus 4 is sold at a loss or barely break even, following the same model as Amazon's Kindle line. It's a class of devices sold using a different business model, regardless of Android.
It remains to be seen whether these can be manufactured at scale--it costs to commit to large scale production, which can be seen in LG's inability to deliver Nexus 4 devices at launch. And it is also doubtful that they can remain competitive over time. Other loss making devices such as game consoles don't see frequent hardware revisions.