$769 Pixel XL costs Google around $286 to make, says IHS Markit

Pixel XL

The cost to manufacture the new Google Pixel XL phone is pretty close to that of rivals Apple and Samsung, according to a preliminary teardown from IHS Markit, who says this only makes sense as the Pixel is aimed at the same class of high-end users that normally flock to flagship smartphone models like the iPhone and Galaxy series.

IHS Markit says the bill of materials (BOM) cost for the new Google Pixel XL 5.5-inch phone with 32GB of NAND flash memory comes to $278. Throw in $7.75 in basic manufacturing costs, and the total cost to manufacture the Google Pixel XL rises to $285.75.

With an unsubsidized price of $769, the direct manufacturing cost-to-sales-price ratio is in line with those of direct competitors in the smartphone market, such as the Apple iPhone 7 Plus and the Samsung Galaxy S7 Edge. The Google Pixel is also available as a 5.0-inch model.

“Total BOM costs for the Google Pixel XL are, not surprisingly, in line with those of other competitors, because the supply base and specs are very similar from phone to phone – whether it’s an iPhone, a Galaxy-series phone or the Google Pixel XL,” said Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit. “The Pixel clearly targets the same top-end flagship space occupied by the Apple iPhone and top-end Samsung Galaxy lines, with retail pricing points that directly compete with these products.”

The Google Pixel may also have an advantage for the time being over counterparts offered by Android rival Samsung, given the permanent withdrawal from the market of the Galaxy Note 7 after manufacturing defects caused the phone’s batteries to explode.

Tripling down on Android

“Google has long used its Nexus line to serve what it deems to be an exemplary demonstration of Android hardware design. Now, some eight years after the launch of the first version of Android, and with Apple iOS and Google Android settled as the dominant platforms, Google has ‘tripled down’ on Android by vertically integrating its smartphone design,” said Wayne Lam, principal analyst of smartphone electronics for IHS Markit. The Pixel is the first-ever phone by Google to carry the company’s famous brand name.

“First, the Pixel is a big departure from the Nexus line of smartphones in that Google has now taken over all aspects of the hardware design and software integration,” Lam said. “Second, this vertical integration of hardware and software is a product strategy taken straight out of Apple’s playbook. And third, not only is Google through the Pixel directly competing with Apple, but also rivaling its own Android ecosystem partners in introducing new premium hardware to compete with the likes of Samsung, Huawei and LG.”

The Pixel comes in two variants—the 5.0-inch Pixel and the 5.5-inch Pixel XL – along with two memory capacities (32 and 128 GB). On top of the Google-designed hardware is the new Google Pixel launcher or “skin,” which imbues the smartphone with a user-experience design that is new and ostensibly more efficient than any OEM-specific design available. For their part, existing OEMs have weighed down Android with their specific look and feel by creating bloated software that run on top of older Android versions.

A premium on design

Both the Pixel and Pixel XL feature an aluminum enclosure with AMOLED displays, which also are utilized for Google’s Daydream virtual reality platform. Moreover, Google spared no expense in packing the Pixel designs with cutting-edge hardware configurations. Both Pixel models also come with 4 GB of LPDDR4 RAM and Qualcomm’s latest Snapdragon 821 CAT-12 LTE modem design, supporting up to three-carrier aggregation and maximum theoretical download speeds of 600 Mbps. With the Pixel, Google is also signaling a design trend toward a complete Qualcomm system-on-chip (SoC) and RF design; the Galaxy Note 7 featured the last such RF360 design.

Another outstanding feature of the Pixel is the high-end mobile photography capabilities of its 12-megapixel camera, with a large 1.55-micrometers (μm) imaging pixel size. While the primary camera does not have optical image stabilization (OIS) in the module, an electronic OIS is provided through the sensor fusion that takes out video shakes via software. In fact, the Pixel’s camera is optimized to take advantage of the available hardware so that it compares favorably to the best camera phones available today from Apple and Samsung.

Notable battery life, but lack of water resistance

Google’s Pixel and Pixel XL sport battery ratings of 2,770 and 3,450 milliamp hours (mAh), respectively, for a very capable 13 to 14 hours of use time over LTE internet. The Pixel also leverages Qualcomm’s QuickCharge 3.0 technology, embedded in the Snapdragon chipset, providing seven hours of use with just 15 minutes of charging. But similar to versions of the Nexus, Google’s previous phone offering, the Pixel does not include wireless charging functionality. More surprisingly, however, Google neglected to include a water-resistant enclosure design on the Pixel. In contrast, the Apple iPhone 7 and Samsung Galaxy S7 both have IP67 or higher ratings to protect those phones against both dust and liquids.

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