The Google Pixel XL is not a cheap phone, as my credit card will attest to. Google have so obviously priced the phone exactly the same as the high end iPhones, aiming at the premium market. It also seems that the cost to manufacture it is on par with the iPhone and the Samsung Galaxy S7 Eddge according to a preliminary teardown estimate from IHS Markit.
In a breakdown of the parts inside the phone the cost of all the parts is just US$278, including all the cables etc included in the box. Add on just under US$8 to put it all together and it comes out at US$285.75. Considering the retail is US$769 it may seem an unfair markup but the markup is in line with that from Samsung and Apple for their phones.
As you can imagine most phones have very similar components, especially at the high end and thus their costs to make are also very similar. By the time you take into account the marketing budget, and let’s face it, the Google marketing for these phones is unprecedented for them in its extent, the legal costs and distribution. A lot of people also tend to forget about the product development and R&D that go into developing a phone, or any product for that matter.
Google are marking up their Pixel phones, there is no doubt about that, but when you take into account the marketing budget they seem to have plus distribution costs they are certainly in line with the other manufacturers of high end phones.
Do you consider this too much of a markup by Google?
