The discounts are great, but there's no way Google could launch at these prices.
Another year, another Pixel launch closely followed by deep Black Friday discounts on the phones, and another cycle of outcry as people complain that Google is taking advantage of early customers by launching at high prices only to discount the phones just weeks later. Pixel fans think that because Google's willing to drop discounts so quickly after launch, it'd somehow be possible for it to just start at those prices. It really, really isn't.
Google probably loses money on every Pixel it sells for $200 off.
The reality is that with every single Pixel 4 Google sells at $200 off, it's probably losing money. At best, it's breaking even. Sure there's a general feeling that Google's Pixels are "overpriced" for what they offer, but that doesn't mean Google's taking hundreds of dollars in profit out of every phone or that there's enough margin built in to actually manage to sell Pixels at Black Friday-level prices from the get-go.
Apple is the only smartphone company that has enough profit margin in its phone business to steeply discount its phones and still make money. The iPhone's margin has been decreasing over the years, but it's still well over 50% — and its average selling price is rising. Naturally, Apple's also just about the only company that can keep its prices high and still sell phones as fast as it can make them, and it rarely offers discounts.
Apple's the only company that has enough profit margin to slash prices and still make money.
Having over 50% margin in the smartphone business isn't common. Even if we took the best large-scale non-Apple margins, which come from Samsung, there's about a 15% profit to be made on each phone. Applied to the Pixel 4, that'd be $120, and with the Pixel 4 XL, that'd be $135. Analysis from the original Pixel estimated 20-25% margin, but component costs have changed considerably since then. Even still, it wouldn't be enough. Google would need to have a margin of some 40% (at current prices) to be able to begin to justify Black Friday prices from launch — and its hardware business simply doesn't operate at the scale necessary to make it happen.
You know Pixel sales are coming — don't buy early and then complain about discounts.
Whether Google has the profit margin necessary to drop prices or not, this shouldn't be your problem to think about anyway. You know exactly when each Pixel is going to go on sale every year, and all that matters is you get it for the price you think it's worth. There's clearly a pattern here: Google is likely to launch a Pixel phone each October; and Google will, just like every other company, have Black Friday discounts. If you don't think the Pixel is worth the MSRP, just wait a handful of weeks and get it for a solid discount — problem solved.
Sales are always going to happen. And every time you buy a phone on Day 1, you're always going to pay the highest-ever price for that product. You're paying full MSRP so you can have the phone first, and that's a trade-off you have to keep in mind when you buy. In the case of the Pixels, if you don't feel it's worth the Day 1 price there's little excuse to complain about Black Friday discounts — you know they're coming, and coming quickly after launch. You don't need Google to change its business model, you just have to wait for the price you're willing to pay.
Google Pixel 4
$600 at Amazon $799 at Walmart
This is easily Google's best-ever phone. The hardware is sleek and efficient, and Android 10 runs brilliantly. Google's additions to the software set it apart, face unlock works incredibly well, and this is the best Android camera available. But the battery life is frustratingly bad, and it's hard not to feel short-changed paying this much for weak RAM and storage.
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