Google's frequent Pixel discounts aim to lure more people into its ecosystem

For Google Pixel 8 owners who paid full price, recent months have likely been a source of frustration. Since launching last October, Google’s flagship phone has seen a constant barrage of discounts, raising questions about the company’s long-term strategy for its hardware.

A calendar check reveals a relentless pattern: November, December, January, February, March, April, and now May with the launch of the Pixel 8a — all boasting significant price cuts across major markets. Discounts of up to $200 on the Pixel 8 Pro have become commonplace, with major retailers gleefully dangling these deals. Interestingly, this isn’t limited to the Pixel 8 series. In fact, just about every Google Pixel product has been discounted several times over the past 6 months, ranging from the older Pixel phones to the latest Tablet, Pixel Buds and Pixel Watch.

But Google hasn’t stopped at headline discounts. They’ve unleashed a multi-pronged attack to entice buyers. High-value vouchers have been sent to YouTube Premium subscribers, trade-in values have been increased, and Google Store users have received surprise $100 store credit offers. Some Google One users even reported receiving a staggering $250 discount on a new Pixel 8. With these tactics, it often feels like the Pixel 8 has spent more time discounted than at full price.

While Google has always been flexible with hardware pricing compared to Apple’s rigidity, this level of aggression is a clear departure. This recent discount deluge suggests a potential new normal for for Google Pixel phones. And to their credit, these tactics seem to be working fairly well for Google. According to recent stats, Google had a 4.6% market share in the US smartphone market for the year 2023. Some markets recorded much crazier figures of up to 527% growth in market share, which shows Google’s marketing and aggressive discounts tactics are rewarding. While Q1 2024 numbers aren’t as impressive compared to Samsung, it’s because the latter’s Galaxy S24 series is currently the talk of the town. But things should get better for Google in Q2 2024 now that the Pixel 8a is available to buy in multiple markets across the globe.

Just like the iPhone is the gateway to Apple’s so-called walled garden, Google seems to be positioning the Pixel as the gateway to its bulging ecosystem of products and services. There’s a strategic mastermind behind Google’s discount frenzy. Google wants to become the Android emperor, a process that has roots stretching back to 2019 with the introduction of their custom Tensor chipset. Recent months have witnessed a significant acceleration of efforts, with Google streamlining its vast collection of paid software services – a crucial step towards building an integrated ecosystem reminiscent of Apple’s success story. Google also recently combined its Pixel, Android, Chrome, ChromeOS, Photos, and other teams into one entity overseen by Rick Osterloh in another strategic move aimed to bring everything together.

The Google One service now bundles Nest Aware and Fitbit Premium, hinting at a more holistic offering. Google Podcasts is merging with YouTube Music, while YouTube Premium boasts exclusive paywalled video quality and AI-powered features. Google Photos, Gmail, Drive, and other Workspace apps have also been revamped with a mix of free and paid AI features designed to boost productivity.

The message is loud and clear. Google wants users firmly embedded within its entire service ecosystem, and a Pixel phone serves as the golden ticket. While accessing these services is possible on non-Pixel devices, Google sweetens the Pixel deal with exclusive features. Remember AI-powered camera tools like Best Take, Magic Editor, and Video Boost? These were initially Pixel-only perks before eventually becoming available to all on Google Photos.

Despite Google’s grand ambitions, Samsung is still ahead as the most popular Android brand and the world’s number two smartphone manufacturer overall. Samsung’s dominance can be attributed to aggressive marketing tactics that directly targeted competitors, alongside generous discounts. As Google strives for a larger market share and increased adoption of its paid services like storage and AI features, these aggressive pricing strategies are likely here to stay. But the company will also want to remember that Samsung’s quality hardware and its vast network of global supply chain played a key role in its dominance. Despite being in business for nearly a decade, the Pixel line has never been the best when it comes to hardware. This is something Google will want to improve on, as well as add more to the current 23 markets where the Pixel is sold officially.

This shift in Google’s hardware strategy raises intriguing questions. Will the Pixel become a permanent resident of the discount bin? Will aggressive discounting become the norm for other Android manufacturers? Only time will tell, but one certain thing is that Google is playing for high stakes in the smartphone arena, and the Pixel is a critical pawn in its ambitious game of Android domination.