Some have questioned why Google would even bother with a cheaper family of Pixel phones given that 1) customers could just buy an older Pixel 2 with decent hardware specs, or 2) take advantage of the many promotional offers that have been available for the Pixel 3 since its release. However, Google explained on an earnings call this week that sales of its Pixel 3 have been lagging since its release.
In fact, Alphabet [Google’s parent company] CFO Ruth Porat says that the Pixel 3 family has encountered “recent pressures in the premium smartphone market.” What does that mean exactly? Well, according to Porat, Pixel 3 sales during the previous quarter were actually less than the same period one year ago.
We have to keep in mind that the Pixel smartphones haven’t exactly been a resounding sales success for Google despite the fact that they are incredibly competent devices with class-leading photo quality (using just a single rear camera, unlike its more adventurous competition).
In the U.S. at least, both Samsung and Apple continue to be the dominant players with their Galaxy and iPhone lines respectively. And the quickly escalating price tags of flagship smartphones can’t be helping either. The Pixel 3 starts at $799, while the Pixel 3 XL is $899. Opting for 128GB of storage pushes the price of the Pixel 3 XL to $999. However, Google is currently running a $200 off promotion, which pushes those starting prices down to $599 and $699 respectively.
One would expect that Google would have to be very aggressive with Pixel 3a/Pixel 3a XL pricing to gain any further traction. If the Pixel 3 can be had for $599 on a regular basis, anything higher than $399 for the Pixel 3a might be a tough sell for consumers. With rumored specs that include a Qualcomm Snapdragon 670 SoC, 4GB of RAM, 64GB of internal storage and a 3,000 mAh battery, $400 seems “about right” to us.
But then again, Motorola is currently selling the Moto G7 with similar specs for a mere $299…