- A couple of people rightly mentioned that one of the key issues was the lack of marketing. Consumer hardware marketing is a different beast. Google did not really back the phones from Moto with real marketing dollars. Hopefully this is being fixed now with the marketing cost being baked into the cost of Pixel.
It is universally recognised that the Google Pixel (2016) is easily $100-200 higher priced than the Nexus series of phones, bringing it from great-value hardware and software, to top end priced hardware, seriously on par with Apple’s iPhones and Samsung’s flagship S7 series.
Still, it is definitely obvious that the Nexus prices were deliberately pushed down to make them super crazy affordable, much lower profit margin than any normal series phone made by HTC/Samsung/Motorola/LG/etc/etc. That’s why it made sense to order a Nexus phones import it from USA versus buying a local phone set.
Now, with the higher pricing, they can build in marketing costs, retailer margins, distribution etc such that the product that you buy off the shelf can be sold at that price. If you don’t realise, most off-the-shelf goods have like 30% shop markup compared to their costs. It’s all the brick and mortar shop rental, staff, ancillary costs. That’s why people went to buy things online where these costs can be taken out and discounted.
A higher Pixel price also means that it can go into telco plans, where telcos get some overhead, where there are effort and costs expended into licensing the phones for use in each local country etc etc. These things all cost money and we used to get around it. That will dramatically help the distribution, and more ‘normal’ people will be able to get the Pixel on their contract plans, from their telcos, instead of paying $1000 to order and ship a phone ownself halfway round the world, instead of buying it off a dingy mobile store. Yeah 99% of normal folk would not do that with an expensive phone. Also, warranty overheads.
Marketing is nice in some ways. Eg if I pay $1000 for a Pixel, people would recognise this phone, they would Know what this is when they see it and they would appreciate how good the software is, and how it compares to their bleh Samsung. (although I can appreciate how fast and smooth some of the new Samsung phones are.)
I hope people trade in their Note 7 for a Pixel, hahaha.