Saturday, 22 October 2016 07:24

Google’s Pricey Mistake With Your Premium Pixel


Google’s mission with the Pixel and Pixel XL smartphones is relatively clear. These are high-end devices designed to showcase Google’s prowess in software and hardware. Unlike the developer-focused Nexus devices the two Pixel models are targeted at the consumer market. They will be portrayed as best-of-breed Android devices, the pinnacle of achievement, and the ultimate smartphones that Mountain View can produce.

All of that hard work is hindered by one factor that was under Google’s control. It picked the wrong price.

There’s no doubt that the Pixel smartphones are competitive in the high-end market and represent a significant investment for those buying the handset SIM-free and without a carrier subsidy. Even those who pick up one under contract will be aware of the price.

The price of a device has a notable impact in how it is perceived. In broad strokes, something that is more expensive will be seen to be of better quality, will have more features, and will be more capable. If I offered you an HTC handset at $199 SIM-Free and one at $399, I’m sure the majority of you would pick the latter. And if I asked you to make a best guess at the features list the latter would be better specced.

The Pixel’s starting price for the 32GB model is $649, rising to $849 for the 128GB Pixel XL. That sets an expectation in the mind of consumers. It gives them a benchmark to compare the various Pixel models to. And the comparison is perhaps the priciest mistake that Google has made with the Pixel.

The iPhone 7′s starting price for the 32GB model is $649, rising to $849 for the 128 GB iPhone 7 Plus.

Google is saying that it can’t do any better than Apple.960x0 Google’s Pricey Mistake With Your Premium Pixel


Rick Osterloh, SVP Hardware at Google Inc., speaks during an event to introduce the Google Pixel phone (Photo by Ramin Talaie/Getty Images)

Apple should not be the arbiter of the upper price band of the consumer smartphone, but manufacturers continue to look at the iPhone’s price as a glass ceiling. The aspirational iPhone is not quite in the luxury pricing market, but the refusal of manufacturers to breach the iPhone price limit for its most popular handset is maddening.

Sony is a good historical example. The Xperia Z range of devices continued to push hardware and specifications that were in advance of the equivalent iPhone - a larger camera, more storage, more expansion options, waterproofing, higher resolutions screen - but the Japanese company tried to undercut the iPhone’s price tag and sell on value instead of maximizing the profit per handset. The better play was to build on Sony’s brand ethos of excellence at a price and go higher than the iPhone in all respects, including the price.

Google is making a similar mistake with the Pixel. For all of the talk of the best camera, the all-day battery (and yes, even the inclusion of a headphone jack) the pricing story says that the Pixels are not better than the iPhones.

Apple iPhone 7 (image: Ewan Spence)

Apple iPhone 7 (image: Ewan Spence)

Five dollars.

Customers walk into stores and ask for the most expensive phone. The Pixel could have had that customer with five dollars added to the sticker price.

That’s all it would have taken. The geekerati would still buy the handset SIM-free, and the extra cost could have been absorbed by Google in the subsidy offered to the carriers. That price would have put the Pixel family higher up the pyramid than the iPhone, it would have suggested that the Pixels are better than the iPhones, and it would have cast Google as not only the company to challenge Apple, but to break through the perceived glass ceiling that Tim Cook has placed on the smartphone market.

If Google is going to be aggressive with the hardware, if it is going to challenge its own manufacturing partners, if it is going to use its Android software as a point of differentiation, then Google is saying the Pixel is better than the competition.

Google should have backed that up with a price that matched the message.

Now read why the internet reviewers have fallen in love with the Google Pixel…

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Source : forbes


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