Was Google's Generosity Actually a Sign of Weakness?

It's not uncommon for attendees of major developer conferences to get free handouts. However, what's less common is for such gifts to be fairly extravagant. At Google I/O 2013, the search giant has chosen to be extremely generous. Chrome and Android exec Sundar Pichai dropped the bombshell that all attendees of the keynote would be receiving a Chromebook Pixel for free.

That's a $1,300 touchscreen laptop that Big G is showering upon the masses. In comparison, attendees of Google I/O 2012 walked away with a free Galaxy Nexus, Nexus 7, and Nexus Q.

Is the gift really a sign of weakness for the Chromebook Pixel?


Apple hears Google's pain
At $1,300, the Chromebook Pixel is seemingly the antithesis of everything that Chromebooks embody -- namely, low price points. The device is positioned directly against Apple's 13-inch Retina MacBook Pro as the only other laptop family on the market with such ultra-high resolutions.

There are two possible ways to read into the handout. Chromebook Pixel sales could be off to a slow start and Google may be trying to clear through inventory. The other explanation is that Google wants to encourage developers to create high-resolution content for the Chrome Web Store that's optimized for such displays, and the easiest way to nudge them in that direction is to give them one as a freebie. It's quite likely that these are both playing a role in the decision.

In fairness, it would even appear that Apple's having a relatively tough time conveying the Retina value proposition in laptops to both consumers and developers. In February, the Mac maker aggressively slashed prices on the 13-inch models by $200 to $300, just four months after launch. That implies that Retina MacBook units are also weaker than Apple expected as well.

It also hasn't been easy for Apple to get developers onboard with Retina-optimized apps. Even Twitter's official app only just recently received a Retina revamp, the first update in two years and nearly a year after the first Retina MacBook Pro was introduced. Apple's MacBook shipments are also in line with the broader industry, which suggests that Retina isn't sparking a new wave of Mac growth.

The Pixel remains positioned in strange place: the ultra-high-end of a niche subset known for low prices. The Pixel probably isn't selling well, but perhaps the market's just not ready for super-high resolutions.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

The article Was Google's Generosity Actually a Sign of Weakness? originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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