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Why Google’s Hopes for Cheap Pixel May Falter

Earlier this month Google released two new budget phones—the Pixel 3A at $399 and a bigger Pixel 3A XL at $479—to rave reviews from the tech press. Even though the device has a lower-end chipset than its pricier sibling and a plastic case without water resistance, it offers a nice camera on par with premium phones. Google’s aim is to deliver “high-end experiences at a more accessible price point,” hardware chief Rick Osterloh said when unveiling the phone.

But based on the current state of the U.S. phone market, Google shouldn’t get its hopes up. New data made available to The Information show that only 10% of phone shipments last year were in the midtier of the market, defined as phones priced at between $251 and $625, estimates BayStreet Research, a market research firm focused on the U.S. phone market. Despite rising prices of high-end phones, they still account for a whopping 80% of phone shipments, the firm found.

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“When somebody only researches a new phone once every few years, price is the biggest signal.”