Pixel Watch spec score fails to explain exorbitant price

Why are Pixel Watches so expensive? The device’s $350 and $400 price tags are much higher than the closest comparable products from Apple and Samsung, especially since Google’s first generation smartwatch uses slower and older parts than other products. The company charges more for less, and while the Pixel Watch is good hardware, it’s hard to make sense of the price compared to faster products with better details like the $250 Apple Watch SE and $280 Galaxy Watch 5.

In a Counterpoint Research report

For comparison, we can take a look at Counterpoint Research’s latest Apple Watch materials estimate, which happened in 2021 for the Apple Watch Series 6. The Series 6’s MSRP was $400, the same as this LTE Pixel Watch, but the Counterpoint materials bill cost more. than Pixel Watch: $136. Like the marketplace, Counterpoint says Apple is offering more watches for less money. Apple is a company known for having the highest profit margins in the industry, but comparing those estimates gives Apple Watch a profit of 66 percent and Google a profit of 69 percent.

That doesn’t even include the hidden cost of the Pixel Watch: the Google Watch Band Kit. Samsung and Apple let you buy a watch case and then choose the watch strap you want to pair with it, so you only pay for the strap you want to wear. Google made everyone buy a lower-end rubber watchband with the Pixel Watch (a $50 accessory), and if you want a better-styled band, it will cost extra. To make matters worse, the watch comes with three watchband halves to cover wrists large and small – you pick the size you want and throw away the extra half. It appears that Google wanted to cut down on smartwatch storage logistics, and this is forcing customers to pay extra for watchband components they don’t need and creating unnecessary e-waste.

The report also provides a breakdown of what Google is spending that $123 on, and it’s not much different from the Apple Watch breakdown. Samsung is gaining wide acclaim as one of the big winners among Pixel Watch components. The Pixel Watch is powered by a Samsung Exynos 9110 SoC and a Samsung modem, both made in Samsung’s foundry, so Samsung accounts for 20 percent of the total package price. The 9110 is a 4 year old chip and Samsung’s own watch offers a newer, faster and more energy efficient Exynos W920 for less money.

In second place is China’s favorite display maker, BOE, which scored 14 percent of BoM according to this estimate. BOE supplied the 1.2-inch OLED display and is currently the main competitor in Samsung’s display division. A common criticism of the Pixel Watch is the large screen bezels, which could be fixed with a better display vendor.

The Pixel Watch is overpriced, but it’s at least a solvable problem. Second generation watches – hopefully Google will create a second generation watch – should be priced in line with competitors with matching specs. Google needs to let people buy only the watch bands they want to cut down on hidden costs and e-waste. The company also needs to get its rebooted Wear OS ecosystem back on track, though it’s making progress every day. We are also still waiting for these metal bands to come out sometime this spring.