Google’s new Pixel 7 and Pixel 7 Pro promise to be impressive phones that could rival Apple’s iPhone 14 and Samsung’s Galaxy S22, all while undercutting Apple and Samsung. Even with outstanding camera and software features, Google made a point to emphasize this during Thursday’s Pixel event. The Pixel 7 starts at $599 (£599, AU$999) while the 7 Pro starts at $899 (£849, AU$1299).
Instead, Samsung charges $799 for the S22 (or $1,200 for the S22 Ultra). Apple, meanwhile, has priced the iPhone 14 at $799 and the 14 Pro Max at $1,099. Unfortunately for Google, that price difference may not matter to the U.S. audience, where consumers still largely buy devices from wireless carriers.
When you go this route, the price difference melts away, as all three major carriers offer a variety of trade-in and upgrade deals on iPhones, Galaxy, Pixels and other devices to both new and existing users. At Verizon, for example, depending on your switch plan and device (and your willingness to stay with the carrier for 36 months), you can get an iPhone 14 Pro or iPhone 14, Galaxy S22, or Galaxy S22 Plus for free . Devices like the iPhone 14 Pro Max, Galaxy S22 Ultra or Z Fold 4 could be had up to $1,000 off. AT&T and T-Mobile regularly offer similar deals.
For carriers, subsidizing the price of a device is a great way to lock users into 24- to 36-month financing plans and make it harder to switch to a rival. It’s also a great way to get people to switch to newer, sometimes more expensive, unlimited monthly plans. While all three vendors have plenty of deals on the new Pixels, they offer similar discounts for Apple and Samsung phones that make the price difference that Google highlights less of an issue.
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According to Roger Entner, an analyst at Recon Analytics, 75% of people in the US who upgraded to a new phone in the period from June to September did so with installment financing.
“People in the US largely fall into two categories. Flagship phone buyers who want all the bells and whistles and budget buyers for [whom] Price is the biggest thing,” Entner tells CNET. He adds that while the Pixels are “a little bit cheaper than the iPhone,” it won’t be “enough to really notice if you’re financing” and will only play a role if you do.pay for phones out of pocket.
He still plays a long game at home and abroad
Google is expanding the availability of the Pixel with the 7 and 7 Pro.
Screenshot by Eli Blumenthal/CNET
After years of working to build the Pixel brand as an alternative to Apple and Samsung, Google still doesn’t have much to show for it. A recent Canalys report that assessed the market through the second quarter of 2022 saw the company growing 230% annually, but even with that growth it still only had a 2% market share in North America.
“I think more aggressive pricing will help Google,” says Bob O’Donnell, president and chief analyst at Technalysis Research. “But given the small size of the market share they have, even if they double it, it would only prove to be incremental.”
One area where Google could benefit from a lower price, however, is overseas. The company is expanding the availability of the Pixel with the new 7 and 7 Pro and will sell the devices in 16 countries.
“I think it also gives them more opportunities internationally,” adds O’Donnell, noting that if Google “can start to get traction, it will give them momentum going forward. It’s probably as important to them as anything.”
Techsponential analyst Avi Greengart agrees. “The biggest news is that Google is expanding its sales footprint into new markets, making the Pixel line less of a US phenomenon and more globally accessible.”