> pricing will limit its market to very small size
I'll give Google the benefit of doubt here. I suspect they priced it high either because their production isn't fully in place to handle a massive surge.
OR they are signalling to the market that Google is not just a bunch of free services but also a premium brand like Apple, and they are willing to sacrifice revenue today to solidify their brand.
I think it's a bit of both. Android has its market established, so Google has more to gain through positioning their brand than driving a little extra revenue.
Edit: Now that I think about it undercutting Android partners might be their primary reason–they can risk upsetting Samsung, but prefer not to piss them off too much.
Another possible reason: you can price something higher with the intention of discounting it to drive sales later (especially after the early adopters pay full price). Generally, in consumer products at least, something for list $649 on sale for $499 will outsell something for list $499.
I'm not saying Google is doing this specifically, but I don't imagine they're as anti-discounting as Apple is.
May be more to it, if they position it at this level, there won't be much conflict of interest with their partners (Samsung, LG, et all), don't know, just a thought.
I'll give Google the benefit of doubt here. I suspect they priced it high either because their production isn't fully in place to handle a massive surge.
OR they are signalling to the market that Google is not just a bunch of free services but also a premium brand like Apple, and they are willing to sacrifice revenue today to solidify their brand.
I think it's a bit of both. Android has its market established, so Google has more to gain through positioning their brand than driving a little extra revenue.
Edit: Now that I think about it undercutting Android partners might be their primary reason–they can risk upsetting Samsung, but prefer not to piss them off too much.