The $599 Pixel 7 price seems low, but the carriers’ iPhone and Galaxy deals are better

Google is new Pixel7 and Pixel 7 Pro promise to be impressive phones that can keep up Apple’s iPhone 14 and Samsung’s Galaxy S22, while Apple and Samsung are undercut in price. Even with notable software and camera features, Google gave this a special mention on Thursday pixel event. The Pixel 7 starts at $599 (£599, AU$999), while the 7 Pro starts at $899 (£849, AU$1,299).

In contrast, Samsung is asking $799 for the S22 (or $1,200 for the S22 Ultra). Apple, meanwhile, is pricing the iPhone 14 at $799 and that 14 pro max at $1,099. Unfortunately for Google, that price difference may not matter to US audiences, as consumers are still largely buying devices from carriers.

If you go that route, the price difference melts away, as all three major carriers offer both new and existing users a variety of trade-in and upgrade deals on iPhones, Galaxies, Pixels, and other devices. At Verizon, for example, you could get an iPhone 14 Pro or iPhone 14, Galaxy S22, or Galaxy S22 Plus for free, depending on your plan and trade-in device (and your willingness to stay with the carrier for 36 months). Devices like the iPhone 14 Pro Max, Galaxy S22 Ultra or Z Fold 4 were available for discounts of up to $1,000. AT&T and T-Mobile regularly offer similar deals.

For network operators, subsidizing the price of the device is a good way of locking users into 24- to 36-month financing plans and making it more difficult to switch to a competitor. It’s also a great way to get people to switch to newer, sometimes more expensive, monthly unlimited plans. While all three providers have many offers for the new pixelsthey offer similar discounts for Apple and Samsung phones, making the price difference that Google is highlighting less of an issue.

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According to Roger Entner, an analyst at Recon Analytics, 75% of people in the US upgrading to a new phone during the June-through-September period did so with financing on an installment plan. 

“People in the US largely fall into two categories. Flagship phone buyers who want all the bells and whistles and budget buyers for [whom] Price is the most important thing,” Entner told CNET. He adds that while the Pixels are “a bit cheaper than the iPhone,” they’re not “enough to really notice if you’re funding” and will only matter if you’re paying for phones out of pocket .

Still a long game at home and abroad

After years of working to build the Pixel brand as an alternative to Apple and Samsung, Google still doesn’t have much to show for it. A recent report by Canalys, assessing the market in the second quarter of 2022, saw the company growing 230% annually, but even with that growth, it still only managed a 2% market share in North America.

“I think the more aggressive pricing will help Google,” said Bob O’Donnell, president and principal analyst at Technalysis Research. “But given the tiny market share size they have, even doubling would only prove incremental.”

However, one area where Google could benefit from a lower price is overseas. The company is expanding the availability of the Pixel with the new 7 and 7 Pro and will sell the devices in 16 countries.

“I think it gives them more opportunities internationally as well,” adds O’Donnell, noting that if Google “can start to gain a foothold, it gives them momentum to move forward. That’s probably as important to them as anything other.”

Techsponential analyst Avi Greengart agrees. “The bigger news is that Google is expanding its sales presence into new markets, making the Pixel line less of a US phenomenon and more globally accessible.”