The Futurum Group's Statement on Israel

Google’s Pixel 3a is a Clever Business Move — Here’s Why

Google Pixel 3a

Google’s introduction of the Pixel 3a, starting at $399, is a clever business move, here’s why.

Sub-$400 (and even carrier-subsidized sub-$200) smartphones from premium brands like Samsung, Google, and others are a game-changer. They address a critical market need. Samsung will have to respond or risk losing some marketshare in US. I doubt that Apple will initially respond, but that could change in 2020 if the market reacts well to this, and competitors gain enough traction.

This dynamic has already been playing out in other markets. For example, in Europe, Samsung offers the J6+ for roughly 150€. It’s a stellar device at a ridiculously low price point, and consumers looking for alternatives to premium smartphone pricing have flocked to it. This move by Google isn’t a shot in the dark. Even Apple is considering a low price-point iPhone for markets like India, where premium pricing isn’t scalable just yet.

There is still a market for $1,000+ premium devices, but that $200-$500 range is ripe for the picking. The risk, obviously, is that introducing consumers to excellent devices at low price-points will shift them away from premium devices, and that’s a fair concern. But two factors appear to be driving the decision to do it anyway—

One, premium smartphone sales are weakening. Consumers aren’t upgrading their phones every year anymore, or even every two years. Device makers need to jumpstart hardware sales again and expand their install base somehow, and

Two, Chinese device makers like Oppo and Xiaomi have successfully begun to capitalize on that opportunity and are making headway there. If premium brands don’t jump in, they risk losing significant marketshare.

The dilemma for premium device makers is to decide which of these two strategies is the biggest danger: Risk cannibalizing sales of premium devices but perhaps make up the revenue and retain their marketshare by offering their own mid-market devices, or protect their premium device business but risk losing revenue and marketshare to “good enough” mid-market devices from competitors.

Google’s decision indicates that it doesn’t want to cede any ground to the likes of Oppo and Xiaomi.

Bonus: And since the Pixel hasn’t yet enjoyed the kind of market penetration that Samsung and Apple’s devices have, this is a perfect opportunity for Google to introduce its phones to a much broader market, expand its footprint, and eventually steer those customers towards its premium phones later.

By the way, the reviews of the Google Pixel 3a are amazing. Here’s one from Wired that rates it a 9/10. And here’s a video that walks you through the highlights:

Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice. 

Related reads:

The iPhone Turns 10, But What’s Next for Mobility?

Author Information

Olivier Blanchard has extensive experience managing product innovation, technology adoption, digital integration, and change management for industry leaders in the B2B, B2C, B2G sectors, and the IT channel. His passion is helping decision-makers and their organizations understand the many risks and opportunities of technology-driven disruption, and leverage innovation to build stronger, better, more competitive companies.  Read Full Bio.


Latest Insights:

On this episode of The Six Five, hosts Daniel Newman and Patrick Moorhead welcome Varun Bijlani, Global Managing Partner, Hybrid Cloud Services Consulting at IBM and Jeff Calusinski, Senior VP and CTO at USAA to discuss the value of a Hybrid-by-Design cloud strategy for modernization.
On this episode of The Six Five – On The Road, hosts Daniel Newman and Patrick Moorhead welcome Ken Exner, CPO at Elastic to discuss their recently unveiled Elasticsearch Query Language and how it fits in with enterprises’ continuous deployment of GenAI.
MongoDB Enhances AI Applications, Offering Efficiency and AI Deployment Improvements
Steven Dickens, VP and Practice Leader at The Futurum Group, shares his insights on the latest from MongoDB. MongoDB's Atlas Vector Search and Search Nodes mark a significant leap in AI application development.
CSP’s Services Division Brings Together Multiple Partners and Technologies to Support New Customer Journeys and Shopping Experiences
Keith Kirkpatrick, Research Director at The Futurum Group, covers Amdocs’ launch of a telco-focused retail store, highlighting how existing, non-invasive tracking technology can be used to create seamless and friction-free autonomous experiences.