Essential Phone Gets a Permanent $200 Price Cut
- Paul Thurrott
- Oct 22, 2017
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10
Essential announced this weekend that its first smartphone, the PH-1, is getting a permanent $200 price cut. Now, the unlocked device will cost a far more reasonable $499.
“One of our driving principles is that premium craftsmanship and the latest technologies shouldn’t be for the few,” Essential’s Niccolo de Masi writes. “We could have created a massive TV campaign to capture your attention, but we think making it easier for people to get their hands on our first products is a better way to get to know us.”
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Android founder Andy Rubin formally revealed his new venture’s first product, the Essential Phone PH-1, in late May. And while I was really impressed by the hardware design, and by the plans that Rubin had for Essential as a company, I was a bit worried about the price: At $699, the Essential PH-1 was initially priced just $70 less than a comparable iPhone 7 Plus.
“It’s still pretty expensive and doesn’t quite hit the same value point as did the Nexus 6P and 5X,” I wrote at the time. “OnePlus does a much better job here. Perhaps the firm will release a mid-market device in the future as well.”
I know I often harp on price. But when it comes to an unproven company like Essential, you need to do something to incite customers to give you a shot. OnePlus prices its phones correctly. Google used to, with some Nexus models, but no longer does with its Pixel handsets. Microsoft never did this correctly either.
Since that initial announcement, Essential has been racked by controversy, and that’s a great reason to not get too excited by this price cut. In late July, it said that it would Essential Phone in “a few weeks.” Then, three weeks later, it said that it was finally on the verge of shipping the first preorders. By the end of September, a market researcher claimed that Essential had only sold 5000 phones.
So here we are less than a month later, and Essential has woken up to the fact that it cannot support the premium pricing models used by market leaders like Samsung and Apple. And it’s even doing right by its early adopters: Anyone who did pay $699 for an Essential PH-1 will now get a $200 credit that they can use towards an Essential 360 Camera or another Essential Phone. That’s fantastic.
But this also reeks of an inventory flush, doesn’t it?
And that can mean only one of two things. That Essential will quickly replace the PH-1 with an improved model. (Perhaps much needed, given that the camera in the PH-1 has received poor reviews.) Or worse that Essentials is about to disappear for good. Which, let’s face it, is very possible.
So we’ll see what happens. But this is the price that the PH-1 should have launched at. And while I was initially excited by this smartphone and still very much support what Mr. Rubin and Essentials were trying to accomplish, I’m not convinced that this company will survive, let alone thrive. And I wouldn’t touch this phone right now, not even at this price.
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Conversation 10 comments
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Bats
<p>Somebody needs to teach Paul economics. There is no such thing as "pricing correctly." There is only such a thing called Supply and Demand. OnePlus has no choice but to undercut Samsung in order to attract buyers of their handset. Essential has no choice but to cut their price because no one is buying it. I bet my life that the 5,000 people who bought the Essential are tech guys, who actually know who Andy Ruben. Again…it's called Supply and Demand. As for price, people are not buying certain phones for the price. Are you kidding me? Price is not even an issue for phones. Paul does not know this because like all tech guys, they find value by simply buying the phone outright. Regular/normal people don't do that. They either buy a phone due to a subsidy that they are getting (as in the old days) or by monthly payment. People put an expensive Samsung phone in their pocket, for only about $30-$40 per month. In addition, I have seen all the major carriers offer promotions on Samsung phones, like "Buy a Galaxy S8 and get one free." LOL….it's true, there are actually BOGO offers for these phones.</p><p><br></p><p>However, Google is different and for some reason, Paul still doesn't get it. Google with Nexus was a partnership with other phone manufacturers. It was a collaboration effort between Google and whoever (phone manufacturer) they were working with. With Pixel, it's 100% Google and 100% Android, the most popular OS on the planet. There is no collaboration or partnership with anyone. </p><p><br></p><p>To suggest that certain companies should price their products because of the popularity of their brand is not just ridiculous, it's just outright stupid. Essential is not like Google. I have not seen one…ONE commercial on tv for the Essential phone. If Microsoft can flood the tv airwaves with commercial after commercial with celebrity endorsements for Windows Phone and fail miserably, then a company such as Essential doing nothing to promote their products….I am not surprised that it is failing. LOL…however to suggest that price was a factor in failings. LOL…no.</p><p><br></p>
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skane2600
<blockquote><a href="#209561"><em>In reply to Bats:</em></a></blockquote><p>"Price is not even an issue for phones." sounds much more like a tech-centric view than anything Paul said. If that were true we'd all buying IPhone X's, Pixel 2's and Galaxy Note 8's. I suggest you consult sales figures.</p>
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skane2600
<p>So a $200 credit toward buying an accessory they were probably not going to buy anyway or a redundant second phone. Sounds like a class action suit settlement rather than a refund.</p>