Google has already tried a lot with the Pixel smartphones and has also had a roller coaster ride with the sales prices. The trend will probably go up again in the next few years, but a completely new product could make smartphones much cheaper in the future. Appropriately enough, Google’s well-established business model would come into play here.
A few days ago we reported that a Google-funded company is offering ads on the lock screen and paying most of the revenue to the network operators, who can then subsidize the device even better. This is certainly not a completely innovative business model, but it is unique in this dimension and should be consolidated with the forthcoming launch in the USA.
Google should not be involved in this company without reason, because it is not only a financial but also a strategic investment. In India and some other countries, according to the company, 400 million people are already presented with advertisements on the lock screen and if people in other countries also accept such form, it will become an important business model and a new pillar for Android.
But Google could not only offer the product and pass on the sales to the network operators but also use it for itself. With the Pixel smartphones and the in-house Google Store, you have all the options that Amazon, among others, also uses for its Fire tablets.
Will this make Pixel smartphones cheaper?
Such additional financing would be particularly interesting for the a-line budget smartphones. Why not charge users 50 or 100 euros/dollars less if they can display ads on the lock screen and use the device for at least 24 months? This has allowed price ranges to be reached where you can compete with devices that you are vastly superior to. In principle, it is certainly also worth considering for the large Pixel series.
The fact that people are not averse to such offers was proven a few weeks ago with the launch of the Pixel Pass in the USA. To a certain extent, users can subscribe to smartphones, which Google itself describes as a “new way of owning a smartphone”. It would not be a big step to expand the whole thing with the advertising-financed offer and it would also help Google to record further growth in the advertising business.
If we go one step further, something like this could also be of interest to many other smartphone manufacturers, who in turn knock on the door of Google. It is well known that some manufacturers are not averse to advertising financing, but due to the completely different business model, they probably have problems finding sufficient advertising partners. I’m curious to see how this develops and whether it will actually become a big topic.
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