When Google (GOOGL) (GOOG) launched its Pixel phone line back in 2016, I commented that the device was nice, but it would not be an iPhone killer anytime soon. Between a high price and limited carrier offering, the device did not seem like it would sell that well. A few generations later, Google has finally decided to really take its shot at Apple (AAPL), as the two giants continue to battle for technology supremacy.
A couple of months ago, I detailed how Google was set to launch a more budget-friendly Pixel device. At that time, the biggest question was how cheap would the device be, with some just saying it would be a little less expensive than the $749 iPhone XR. Well, on Tuesday, Google revealed the new Pixel 3A and 3A XL, and the devices came in at a price point that looks to be surprising to the overall smartphone market.
(Source: Verge article, seen here)
Now, the new 3A and 3A XL smartphones come in with 5.6 and 6.0-inch displays, respectively, putting them close to the size of most new iPhones. However, the new Pixels don’t have top-of-the-line specs in every category, allowing for the low price. The device’s rear uses plastic instead of glass, has a more basic processor, and 64 GB max storage. You also don’t get wireless charging, but that’s not a killer for most consumers. The big selling point as the Verge details in the link above is the impressive Pixel camera setup that Google is known for, not drummed down in these budget phones.
What separates this offering from the previous Pixel ones is price and carrier availability. These two smartphones go for $399 and $479, well below the previous models as well as all newer iPhones. Also, T-Mobile (TMUS), Sprint (S), and US Cellular join for support, as opposed to the previous generations that were Verizon (NYSE:VZ)-exclusive. Carrier availability was one of my main arguments against the phones previously, as it reminded me of the failed BlackBerry (BB) Priv launch.
I’m curious to see if there will be any major response from Apple when it comes to the iPhone. Do we perhaps see the iPhone get a little cheaper when it is launched later this year, as consumers seemed to push back against higher prices last year? Or, does the company maybe satisfy a small niche of consumers by launching a new version of the SE, a smaller screen device that could come in at a lower price point?
Before all of the Apple supporters come rushing at me, I am not arguing that Google is going to eat Apple’s lunch anytime soon. However, the launch of a cheaper device with more carrier availability is something to watch in the coming quarters. Not only is Google trying to steal market share in terms of unit sales but pushing consumers away from Apple services as much as possible as well. A few million more unit sales will not make a big impact on Apple this year, but this is definitely a stronger shot than Google has taken previously. Where this becomes an issue for Apple is if the Pixel line continues to grow moving forward with Google trying to expand sales into the tens of millions of units per year.
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