The Pixel Watch is a wonderful piece of hardware, but it is hard to justify its $350 and $450 price tags compared to models with superior components, such as the $250 Apple Watch SE and the $280 Samsung Watch 5.

Is it unreasonably expensive?

In a report by Counterpoint Research, which breaks down the Bill of Materials (BoM) for Google's Pixel Watch, manufacturing the $400 LTE version of the gadget costs $123. 

The $123 BoM implies Google is charging more than the competition rather than having a supply chain issue. 

Of course, businesses must incorporate significant profit margins into their goods to pay for R&D, labor, and other expenditures and validate the initiative.

Brand Comparison

Counterpoint Research did the latest material cost estimate for an Apple Watch in 2021 for the Apple Watch Series 6, too.

The Series 6 and this LTE Pixel Watch both had a suggested retail price of $400. But turns out, the Series 6 cost more than the Pixel Watch to produce, which came to $136. The market seems to agree that Apple is providing superior value for its Watch product line. 

Based on these numbers, the Apple Watch has a profit margin of 66%, and Google has a profit margin of 69%. This is despite Apple's reputation for having the largest profit margins in the market.

Also Read: Google Shares How to Make Pixel Watch Last for 24 Hours of Battery Life

Material Cost Breakdown

The research also breaks out Google's $123 expenditure, as reported by Ars Technica. The Pixel Watch analysis highlights Samsung as a major component winner. Samsung Foundry made the Pixel Watch's Exynos 9110 SoC and modem, which made up 20% of the BoM cost.

BOE, China's preferred display maker, got 14% of the BoM. BOE provided the 1.2-inch OLED display and is Samsung's major display division competitor. The Pixel Watch's screen bezels are a popular criticism, but a better display provider might have addressed them.

Not included in the estimation is the cost of Google's watchband bundle for the Pixel Watch. Both Samsung and Apple let you purchase a watch body separately from the band, so you only pay for the band you really use. 

With the Pixel Watch, Google forced everyone to purchase the cheapest rubber band, a $50 add-on. If you want a nicer band, it costs extra. 

To make things worse, the watch comes with three band sections to fit big and small wrists. Choose your size; now, you must chuck away the other halves.

The Pixel Watch is pricey, but it is an issue that can be addressed. If Google produces a second-generation watch, it should be priced competitively and have comparable specifications.

Also Read: Google's Pixel Watches Now Include Fall Detection