Enlarge / The Pixel Watch. It's a perfect, round little pebble. (credit: Ron Amadeo)
Why is the Pixel Watch so expensive? The device's $350 and $400 price tags are well above the closest comparable products from Apple and Samsung, especially considering Google's first-generation smartwatches use slower, older parts compared to other products. The company is charging more for less, and while the Pixel Watch is a nice piece of hardware, it's hard to make the price make sense compared to faster products with better parts, like the $250 Apple Watch SE and $280 Galaxy Watch 5.
Counterpoint Research's report details the Bill of Materials (BoM) for Google's Pixel Watch, and comes to the conclusion that the $400 LTE version device costs $123 to build. Companies always need to build big profit margins into their products to cover R&D, labor, and other costs, and to justify the endeavor, but the $123 bill of materials shows Google is just charging more than the competition rather than facing some kind of supply chain problem.
For comparison, we can look at Counterpoint Research's last bill of material estimate for the Apple Watch, which happened in 2021 for the Apple Watch Series 6. The Series 6 had an MSRP of $400, the same as this LTE Pixel Watch, but Counterpoint's bill of materials had it costing more than the Pixel Watch: $136. Just like how it feels in the market, Counterpoint says Apple is offering more watch for less money. Apple is a company famous for having the highest profit margins in the industry, yet comparing these estimates would give the Apple Watch a 66 percent profit margin, and Google a 69 percent margin.
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Enlarge / The Pixel Watch. It's a perfect, round little pebble. (credit: Ron Amadeo)
Why is the Pixel Watch so expensive? The device's $350 and $400 price tags are well above the closest comparable products from Apple and Samsung, especially considering Google's first-generation smartwatches use slower, older parts compared to other products. The company is charging more for less, and while the Pixel Watch is a nice piece of hardware, it's hard to make the price make sense compared to faster products with better parts, like the $250 Apple Watch SE and $280 Galaxy Watch 5.
Counterpoint Research's report details the Bill of Materials (BoM) for Google's Pixel Watch, and comes to the conclusion that the $400 LTE version device costs $123 to build. Companies always need to build big profit margins into their products to cover R&D, labor, and other costs, and to justify the endeavor, but the $123 bill of materials shows Google is just charging more than the competition rather than facing some kind of supply chain problem.
For comparison, we can look at Counterpoint Research's last bill of material estimate for the Apple Watch, which happened in 2021 for the Apple Watch Series 6. The Series 6 had an MSRP of $400, the same as this LTE Pixel Watch, but Counterpoint's bill of materials had it costing more than the Pixel Watch: $136. Just like how it feels in the market, Counterpoint says Apple is offering more watch for less money. Apple is a company famous for having the highest profit margins in the industry, yet comparing these estimates would give the Apple Watch a 66 percent profit margin, and Google a 69 percent margin.
Read 4 remaining paragraphs | Comments
March 03, 2023 at 03:45AM
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