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The article suggests because Nexus 4 doesn't have LTE, it costs so little. Is that true? Why does the unlocked Samsung SIII run $800?

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I thought the suggestion was more that by producing just one variant for all markets/regions/carriers, Google/LG can leverage economies of scale to bring the overall price down.

I haven't looked at the S3, but past Samsung models have had a bunch of variants marketed under the one model name.

(How much this really factors into the pricing, I doubt if we or Wired can really know.)

In addition, no LTE allows them to run a smaller battery, which also holds costs down.

Simple, Samsung has to sell there product in an attempt to make a profit on them, Google on the other hand is selling theirs at or near cost as a "Content delivery system". They don't need to make money up front for the device.

That doesn't explain the 500 USD markup per _device_

Well lets assume they want a markup of 40% for profit, that would bring the cost to 420. The price I am seeing is $550 on amazon. This brings the cost difference at $110, and IMO this could easily be chocked up to R&D and other misc costs.

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