Google is Trying to Adopt Apple's Strategy of Achieving Profit Margins: Reports

BENGALURU: According to the reports by CNET and Bloomberg, when it comes to pricing, Google’s Pixel smartphone is staging a tough competition with iPhone. Reports also suggest that the search giant is trying to adopt Apple’s approach in terms of gaining profit margins. IHS Markit, a firm specialized in analytics and information released the reports based on their analysis. The research firm claims that the bill of components used for the Pixel XL is similar to that of the components used by Samsung Galaxy S7 Edge or iPhone 7 Plus.

“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,’ says Andrew Rassweiler, Senior Director of the Cost Benchmarking Services, IHS Markit. He further states that the Pixel phones are trying to occupy the same high-end flagship arena adopted by Apple’s iPhone and Samsung’s Galaxy phones. Similarity in the retail pricing models of the products is cited to be the key factor that stages a competition between the devices.

Although the Pixel phones are highly priced, Google is adopting Apple’s approach of offering the best hardware and software available; delivering exceptional user experience.

Furthermore, breakdown of the bill of components only indicate the profit margin model adopted by Google, but it does not include the cost involved in marketing the product, and its research and development.

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