Opinion: Google Is Pricing The Pixel Out Of Its Niche Market

Google is expected to announce the Pixel and Pixel XL smartphones at an event on October 4th. Which they formally announced earlier this week. The company didn't announce what would debut there, but the hints in the invite definitely point to the new Pixel smartphones from Google, that have been going around the rumor mill as of late. These smartphones are being made by HTC, even though Google is touting the fact that they are "Made by Google". While these devices have not been announced, there have been many rumors surrounding them, as their normally are when it comes to Google's new smartphones (formerly the Nexus line). One of those rumors was in regards to pricing.

The first rumor surfaced stating that one of the devices would cost $649. Many thought that would be the Pixel XL and could be the 128GB model. Other rumors were stating that Google was doing just 32GB and 128GB models for both the Pixel and the Pixel XL. However, a new rumor surfaced earlier this week, that the Pixel (the smaller of the two smartphones) would have a starting price of $649. Meaning that the larger Pixel XL would be going for at least $700 if not $750 for the 32GB model. That's a huge price increase over the Nexus 6P from last year, which launched with a price of $499 for the 32GB model and $649 for the 128GB model. That's also a stark difference from what Nexus devices had been priced at in recent memory. Aside from a few smartphones, the majority of Nexus devices have been priced fairly low, like the Nexus 4 which was priced at just $299. The Nexus 5 saw a slight bump in price, but the Nexus 6 was a huge bump. Sitting at $649, similar to what the Pixel is rumored to be priced at. So it's not necessarily unprecedented, but it's not going to sell as well as if it were priced closer to the Nexus 6P's pricing from last year.

After all, those that are in the market for a Nexus device - or now a Pixel device - are looking for stock Android, and most of the time, they are looking for an unlocked smartphone. And thanks to OnePlus, ZTE and Lenovo, they can get that at a lower price now with the OnePlus 3, ZTE AXON 7 or the Moto G4 Plus. The Nexus market is a very niche market. And it's a market that has gotten used to being able to pick up a high-end flagship device for a very low price. However, this could be Google looking to play with carriers once again. Something that they seem to do about every other year. The Nexus 6 was the last Nexus device to be available on a carrier, and it was available at all four carriers, which is what many people believe led to the higher price on the Nexus 6. Especially since it was really just a larger Moto X 2014 that Motorola had released about a month beforehand. The Nexus 4, which is still the all-time cheapest Nexus smartphone, didn't launch with any carriers. It was only available at full retail price from Google Play, but then later on it made it to a few other retailers. The Nexus 5 was available at a few carriers, but not many, Verizon was left out of this one.

With the Pixel and Pixel XL, the rumor mill is saying that Verizon will be carrying both devices. However, they will be the only one carrying them. This doesn't mean that you'll only be able to get them from Verizon, unlike the Moto Z, the Pixel and Pixel XL will most likely be available from the Google Store and possibly Amazon and Best Buy as well. But playing with a carrier like Verizon means that you have to go by their rules. And that may be why the price is higher this year. Let's face facts here. If the Pixel XL were $749 at Verizon, but Google was charging just $499 for the same device that also worked on Verizon and the other carriers, how many Pixel XL's do you think Verizon would sell? Not many. Really only those that are too impatient to wait for the device to ship to their home. So unfortunately, Google may have to play by Verizon's rules if they do want their smartphones to be available on the nation's largest carrier.

On the flip side of things here, Pixel devices are not known for being cheap. The original Chromebook Pixel was released in 2013 and  cost $1299 for the WiFi model. That was not a cheap price, especially since most Chromebooks at that time were under $300. Now Chromebooks have started to creep up in price and become a bit more premium. The second Chromebook Pixel was released in 2015, and it had a price tag of $999. A $300 price drop compared to the version from two years earlier, but still not a cheap Chromebook whatsoever. Then there's the Pixel C. There's plenty of rumors about how this was supposed to be a Chrome OS-powered tablet, but those plans were scrapped and it was turned into an Android tablet. This launched with a price of $499. Not all that bad of a price, pretty comparable to other tablets with the same specs, but it could still have been a bit cheaper. So now that Google's smartphones are carrying the "Pixel" name, it wouldn't be unexpected to see their price go up, but also their build quality.

Build quality on Google's smartphones have definitely gotten better over the years, with the Nexus 6P having the best build so far. Featuring an aluminum unibody, something that many of the hardcore tech fans were looking for and wishing for. However, HTC is also known for their build quality. If you've held the HTC 10 or really any of their recent flagships, then you know that they don't mess around when it comes to build quality. And with Google having them build the Pixel devices this year, it's definitely going to be exciting to see how well the build quality stands out here. It's something that has defined Pixel devices in the past, and should hopefully define them in the foreseeable future, along with that light bar that everyone seems to love. That would be pretty sweet to see on a smartphone, although it may affect battery life.

If the rumored pricing is indeed correct for the Pixel and Pixel XL, Google may be pricing itself out of the niche market that it has created. And putting itself in the market of the iPhone 7, Galaxy Note 7 and even the LG V20. All of which are near or over $700 full retail price. But what many analysts are saying is that Google is betting on finance plans. They debuted finance plans last year with the Nexus 5X and Nexus 6P, but they were only available to those on Project Fi, not everyone else that bought a Nexus device. Analysts seem to believe that will change this year, and that financing will be available to everyone. Google believes that if users are able to finance the purchase, they are more willing to spend a bit more on their smartphone purchase. Which makes the nearly $700 price tag a bit easier to stomach, since it'll be spread out over 12 or 24 months. This is the exact same thing that carriers have been banking on in the past couple of years, in regards to selling smartphones, and it appears to be working pretty well for them.

One thing is for sure though, come October 4th, we'll know for sure whether Google is pricing the Pixel and Pixel XL higher than previous Nexus devices, and whether they are tying up with carriers. The announcement isn't all that far away, and for many, it'll feel like Christmas. So it's definitely an exciting time.

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About the Author
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Alexander Maxham

Section Editor
Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]
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