Enlarge / The Pixel Watch. It is an ideal, spherical little pebble. (credit score: Ron Amadeo)
Why is the Pixel Watch so costly? The machine’s $350 and $400 worth tags are effectively above the closest comparable merchandise from Apple and Samsung, particularly contemplating Google’s first-generation smartwatches use slower, older components in comparison with different merchandise. The corporate is charging extra for much less, and whereas the Pixel Watch is a pleasant piece of {hardware}, it is laborious to make the value make sense in comparison with quicker merchandise with higher components, just like the $250 Apple Watch SE and $280 Galaxy Watch 5.
Counterpoint Analysis’s report particulars the Invoice of Supplies (BoM) for Google’s Pixel Watch, and involves the conclusion that the $400 LTE model machine prices $123 to construct. Corporations all the time must construct huge revenue margins into their merchandise to cowl R&D, labor, and different prices, and to justify the endeavor, however the $123 invoice of supplies reveals Google is simply charging greater than the competitors slightly than dealing with some sort of provide chain downside.
For comparability, we are able to take a look at Counterpoint Analysis’s final invoice of fabric estimate for the Apple Watch, which occurred in 2021 for the Apple Watch Sequence 6. The Sequence 6 had an MSRP of $400, the identical as this LTE Pixel Watch, however Counterpoint’s invoice of supplies had it costing greater than the Pixel Watch: $136. Identical to the way it feels available in the market, Counterpoint says Apple is providing extra look ahead to much less cash. Apple is an organization well-known for having the very best revenue margins within the business, but evaluating these estimates would give the Apple Watch a 66 % revenue margin, and Google a 69 % margin.
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