This article first appeared on GuruFocus.
Higher memory costs are starting to affect consumer electronics more directly, Alphabet Inc. (GOOGL, Financials), the parent of Google, upped pricing on its new Pixel 11 smartphone range. The Pixel 11 starts at $899, with the Pixel 11 Pro and Pro XL starting at $1,099 and $1,299.That’s $100 more than the previous generation. Google already warned that surging memory prices will push device costs as AI data centers battle for semiconductor capacity.The new phones nevertheless provide additional storage, with all three models starting at 256GB, helping to mitigate some of the price rise. Google is making big investments in AI, too.The Pixel 11 comes with a new Tensor G6 CPU and Gemini Nano, which the firm claims can perform on-device AI tasks 3.5 times quicker while consuming less power.The greater question for investors is if the increased cost of the gear is starting to become a broader consumer problem.If memory prices remain elevated, Google could not be the last smartphone vendor forced to pick between higher prices and reduced margins.
