Monday, August 12, 2013

Why the Price of the Chromebook Pixel Matters

I am going to take an unpopular position, but I am growing weary of the demands by some that the Pixel should be all that it is and still be sold for $250 or less.

I completely reject the B.S. that is being spread in the marketplace—Belief System that is.

No one expects a Bentley for the price of a Scooter. Why are so many outraged by a $1,500 laptop?


Here are 10 reasons why the Chromebook Pixel is priced right—perhaps even lower than it should be.
  1. Quality costs money. Just because you don't think the Pixel should be $1,500 (and instead should be sold for $250) doesn't mean you're right. The Pixel is first-class, but you don't understand it until you use one.  
  2. Market perception needed to shift. There is a psychology behind pricing. Most people assume that the more expensive a product is, the more valuable it is. Very often price and quality are linked. And perception is powerful. This had to be addressed to avoid the fate of the netbook niche that has almost vanished. I still remember the outrage around the $500 Samsung 550 Chromebook. Comparing that to a $1,500 Pixel, it seems reasonable. And so would a new mid-range Chromebook price around $800. (Magic!)
  3. Google drew a line in the sand. Moving upstream is tough; only companies committed to a product line do it. Chromebooks needed to prove that they could become a trusted resource for consumers. Continuing to move up market (something you see across many verticals) is important to build confidence in consumers which will help them be more comfortable making the switch, even if not everyone chooses the premium option.
  4. IT directors needed to pay attention. Google needed to get the attention of key decision makers. I'm talking about IT directors and developers who appreciate quality. Getting their attention with the Pixel is important—even if they purchase the Samsung ARM Chromebook in bulk. Corporate installs are critical for the success of Chromebooks. Why? Exposure. Mass exposure within the education market was key to the success of Apple early on. Google has shown a commitment to the business and education communities. This is a good move.
  5. Executives needed to carry it into the Boardroom. Microsoft is synonymous with business. Or at least it has been. Google needed to make it into the place where decisions are made. Executives don't want to carry anything cheap into the boardroom. The Pixel looks great and holds its own around the table full of Macbooks and Windows laptops.
  6. The price of the Pixel created a backlash of criticism. You solidify your core base by beckoning the screaming criticism of others. Social movement theory teaches that if you want to energize a base, creating an "us vs. them" scenario. As the criticism heightens, Chromebook supporters respond with escalating force, too.
  7. The "disposable Chromebook" concept needed to be disposed of—completely. Google had to move away from the notion that Chromebooks are disposable devices. I have the 11in Samsung ARM Chromebook. It is great for taking to the beach, pool, or letting my kids use it, but it isn't something I'm comfortable sitting in front of a client with. Disposable cameras didn't exactly do great things for Kodak in the long run. Google new that if they wanted to be a successful hardware manufacturer, they were going to have to do better than produce disposable laptops.
  8. Research and development costs money. Better margins give Google the capacity to continue to develop future Chromebooks. Margin is what continues to allow a company to invest in future innovation. Since Google isn't dependent on hardware revenue, it can (theoretically) invest all the margin from Chromebook sales into making it even better. Moving the price point up was a risk worth taking.
  9. Revenue directs corporate and shareholder attention. When you make shareholders money, you get permission to continue to push the envelope for long enough to reach the tipping point of mass adoption.
  10. It forced the question of whether or not Chromebooks are a priority for Google. The answer is a resounding: Yes! The Pixel places Chromebooks as a contender for professionals looking for a professional laptop. It also captured the attention of developers by providing a device that could display the best parts of the software they could create. Before the Pixel, this was not the case.
Even putting all those reasons aside, the Pixel is still a great deal.

The cost of one terabyte of Drive space is $1800 ( $50/Mo for 36 months). That feature alone makes the Pixel a great deal. (No other laptop manufacturer is offering anything close to that kind of offer.) And then there is the built-in LTE functionality. An essential feature for anyone who works and travels.

For all these reasons, I believe the price of the Pixel is perfect.

Do you think the price of the Pixel matters? If yes, how so?