Google Pixel XL Manufacturing Cost is in Line with Rival Smartphones

Estimated reading time: 4 minutes

The cost to manufacture the Google Pixel phone closely matches that of its intended rivals—a logical and expected move, especially since Google’s new offering figures to target the same class of high-end users that normally flock to flagship smartphone models from Apple and Samsung.

All told, the bill of materials (BOM) cost for the new Google Pixel XL 5.5-inch phone with 32 gigabytes (GB) of NAND flash memory comes to $278, according to a preliminary teardown estimate from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

After including $7.75 in basic manufacturing costs, 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 now 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.

Hardware design “triples 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.”

Comfortable in its own skin

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 original equipment manufacturer (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 active-matrix organic light-emitting-diode (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 megabits per second (Mbps). With the Pixel, Google is also signaling a design trend toward a complete Qualcomm system-on-chip (SoC) and radio frequency (RF) design; the Galaxy Note 7 featured the last such RF360 design.

Best-in-class camera

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 4G Long Term Evolution (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.

About IHS Markit  

IHS Markit is a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.