Google Finally Figured Out Its Pixels Were Overpriced

Google’s Pixel phones have always been relatively expensive. Not relative to their key competitors, the Samsung Galaxy and iPhone of the year, which have always carried similar prices, but relative to the specs and capabilities that they offer. And most importantly, relative to the fact that very few people have been willing to switch from the phone brand they know to try a Google Pixel for the first time.

If the latest Pixel has the same price as the Samsung phone you’ve been using, but looks bland and doesn’t have the same level of specs — or sale incentives from carriers and retailers — why are you going to give it a try? The “Google” name apparently hasn’t been enough to convince many people.

But Google figured something out with last year’s Pixel 3a and Pixel 3a XL: If you drop the price, people will start to consider Pixels. Google’s overall Pixel sales were up over 50% in 2019, overwhelmingly due to Pixel 3a and 3a XL sales, which were reportedly more than double that of the Pixel 3, despite launching halfway into the year. Pixel 4 and 4 XL sales were reportedly abysmal, which frankly isn’t too surprising considering the tepid response the phones got from even the biggest Google fans.

The most telling thing was that even with the more expensive Pixel 4 and 4 XL being considered flawed and overpriced, presumably tarnishing the brand’s image, people still continued to praise the 3a series, even into 2020. There’s zero doubt that the Pixel 3a and 3a XL continued to outsell the Pixel 4 series, beyond just what you’d expect given their price difference.

Google finally figured out that its Pixels were way too expensive — and now it’s flipping the strategy to focus on competitive pricing.

Thankfully, Google has taken this to heart and is clearly deploying a new strategy. The Pixel 4a is a fantastic phone, perfectly building on the legacy of the Pixel 3a with an excellent experience and stellar camera quality — and better yet, Google even shaved $50 off the price compared to the Pixel 3a. Reviews are, understandably, overwhelmingly positive, and the Pixel 4a is currently the best-selling unlocked phone on Amazon. The larger, 5G-enabled Pixel 4a 5G is expected to be $500, still a very manageable price for many people.

Even this year’s “higher-end” Pixel 5, expected in October, is going to come in as a less feature-packed and lower-specced device than last year’s Pixel 4 — with a palatable price to match, reportedly around $650. Google’s new understanding that many people have grown tired of ever-increasing phone prices makes Samsung’s latest flagship approach look particularly out of touch. With a Galaxy S20 starting at $999 and the Note 20 Ultra launching at $1,300, seeing Google’s highest-end phone of the year have a price that starts with a 6 is incredibly appealing.

The new focus on lower prices across the Pixel line makes Samsung’s latest flagship approach look particularly out of touch.

Now that Google is leaning more and more toward a strong value proposition, undercutting what used to be its dollar-for-dollar competitors, it actually has a chance at growing what is still a tiny market share. Because while a Pixel may not seem particularly appealing at first glance, most people quickly “get it” as soon as they actually use one — and particularly, once they see what Pixel cameras can do. But the only way people will be willing to try the Pixel for the first time is if it’s dramatically less expensive than the big brand names they know and use right now. It’s not unlike what OnePlus had to do for years to gain brand recognition.

I still fully support the decision to have a more expensive Pixel 5 model, with the extra specs, nicer hardware, and neat features that are the icing on the cake for less price-conscious buyers who want the best experience Google has to offer. But it clearly can’t put so many eggs in that basket.

Google has to flip the script and instead of using the Pixel 5 as a “halo” device that boosts sales of the whole portfolio, use the inexpensive Pixel 4a (and forthcoming Pixel 4a 5G) to bring new people into the brand and move them up to the top Pixel later. It’s well on its way to forming that structure, and it’ll be fully realized by the end of the year.

Google finally figured out Pixels were overpriced, and it’s making good in 2020

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