Only $499 for the Pixel 8a is crazy. How can Google do it?

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Google has announced the Pixel 8a, and on paper, it looks like we have a new budget phone king to crown. That's nothing new, as Google's Pixel "a" series of phones has always been of great value, but this year, Google has stepped things up a notch.

You're basically getting a Pixel 8 disguised as a "budget" phone, saving you $200. I love to see it. Unless something catastrophic happens once it gets into people's hands, this one will be the phone to buy if you're looking for something really good and don't want to spend too much.

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It makes you wonder how Google can afford to do this. Year after year, Google sells an A-series Pixel phone that offers exceptional value compared to anything else out there. However, like Samsung's Fan Edition models, there have always been compromises. Early Pixel A phones were slippery plastic with underpowered chips inside that performed OK but didn't pack flagship hardware. 

I'm sure the Pixel 8a is missing something important to someone, but a glance at the hardware tells me that small differences in the cameras, a lack of Wi-Fi 7, and a different version of Gorilla Glass are the biggest changes from the Pixel 8. You still get all the fancy Gemini and camera software AI tricks, the same services, and the same connectivity options.

Google isn't losing money doing this. While it's more expensive outside of the U.S., the Pixel 8a can still be a money-maker at just $499 because it does the most important thing for Google's business — gets a good phone in your hands and in front of your eyeballs.

Google is more than a hardware company. I'd say it isn't much of a hardware company at all and only does it to get devices into as many hands as possible. Google is also an advertising company, a software company, and a services company. That's why it sells hardware in the first place.

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Some companies, like Apple or Samsung, also provide software services, but the bulk of their business is hardware sales. 

Both have tried to sell a "flagship-budget" phone and had some level of success before drifting away from the idea. Samsung can make more money selling great midrange phones that are more than good enough for almost everyone, and Apple manages to make most of the money despite having only 20% of the worldwide market because it's streamlined the manufacturing process — there's a lot of profit made from a single iPhone.

This is what works for Apple and Samsung, and both are very successful. Google doesn't make any money from selling phones or tablets. It makes money from people who use phones or tablets, no matter which brand people are buying from. If you use the internet, Google will probably make money from it.

Google Gemini on Android at MWC 2024

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The Pixel 8a is also a vehicle for Google's software and subscription services. If you have a phone with a good camera, you'll use it more and might be tempted by Google's cloud offerings. If your phone is fast and has a great screen, you'll watch more YouTube and might buy YouTube Premium. When your phone is better at playing games, you might spend money on Google Play.

All of this applies to any of the best Android phones like the Galaxy S24. It also applies to people using an iPhone. Here's a shocker though — most people aren't buying $1,000 phones. Getting a phone that feels like a $1,000 phone into more hands means more people will be tempted to go all-in with Google's software because it's there and it works.

It's tough to find a new phone that isn't good enough. Even the cheapest Android phones are pretty amazing compared to how things were a few years ago. Google can afford to sell the Pixel 8a without much per-unit profit because getting a great phone in more hands is more important.

I think the Pixel 8a is Google's real flagship phone.

Jerry Hildenbrand
Senior Editor — Google Ecosystem

Jerry is an amateur woodworker and struggling shade tree mechanic. There's nothing he can't take apart, but many things he can't reassemble. You'll find him writing and speaking his loud opinion on Android Central and occasionally on Twitter.

  • SeeBeeEss
    AC News said:
    Google has packed premium phone specs into a budget price tag and isn't going to lose any money doing it.

    Only $499 for the Pixel 8a is crazy. How can Google do it? : Read more
    How can Google do it? My guess would be by charging me, and everyone else who bought one, too much for our Pixel 8 Pro's. 😉

    Just kidding. Please, fellow P8P owners; please don't rake me over the coals for being irreverent. I really do love my "break the bank" Pixel.
  • Daniel Gomes
    It's only that cheap in the US. Here in Europe it's closer to €580 (which is $625.05)

    The rest of the world is subsidising it for the US.
  • Stanley Kubrick
    When did $500.00 for a phone become a "cheap" deal? What did it actually cost Google to produce it...
    How much more money will they make from harvesting data from those who use it?