Perhaps the most surprising thing about the new Pixel smartphones introduced by Google yesterday was their hefty price tag. At $649 and $769, the Pixel and the Pixel XL are priced exactly as high as Apple’s recently introduced iPhone 7 and 7 Plus, breaking with Google previous strategy of marketing its phones as a lower-priced alternative to its competitors’ flagship models.
As our chart illustrates, the new Pixel XL is the most expensive smartphone Google has ever made (or put its label on to be more accurate) and it will be interesting to see if the company can compete with Apple and Samsung in the high-end segment of the market. As opposed to Apple, which makes most of its money selling hardware, Google’s business has always been focused on services. Thus far, Google’s smartphone ambitions were mainly seen as a means to an end, namely to tie users to its services.
Yesterday’s announcement seems to be a departure from that strategy. If the only goal of the Pixel phones would be to get more people to use Google services, the high prices wouldn’t make sense. So maybe Google is getting serious about hardware after all.
