Google Debuts Lower-Cost Pixels as iPhone Demand Shrinks

Google unveiled a suite of new products Thursday (Oct. 6), including its first-ever watch and phones priced lower than the ones offered by market leaders Apple and Samsung.

Announced in a company blog post, the products include Google’s Pixel 7 and Pixel 7 Pro phones, which the company said offer improved voice and camera, as well as Face Unlock, a facial recognition feature to help users more easily access their phones.

The phones will sell for $599 and $899, respectively, and include the new generation of Google’s in-house Tensor chip, the post stated. Pricing for the basic version of the iPhone 14 — the newest version of Apple’s flagship product — was at $799 Thursday.

“With Google Tensor G2, we’ve improved almost every major subsystem in the chip, and we’ve designed them to work really well together to handle the nuanced and complex nature of our software and machine learning,” Google Vice President for Product Management Brian Rakowski wrote in the post. “So, your smartphone is even smarter, especially when it comes to understanding speech and language.”

The launch of these new products come as Apple has scaled back its factory output for new iPhones due to weak demand.

Read more: Weak Appetite for iPhone 14 Prompts Apple to Reel in Factory Output

Production of the iPhone 14 is expected to be reduced by as many as 6 million units in the second half of this year.

The company had said in August that it planned to make 90 million iPhone 14 units for a total of 220 million iPhones produced this year, the same amount as 2021.

Demand for smartphones is expected to contract, with the market projected to shrink by 6.5% in 2022 to 1.27 billion units, according to market tracker IDC.

“The supply constraints pulling down on the market since last year have eased, and the industry has shifted to a demand-constrained market,” said Nabila Popal, research director at IDC.