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this post was submitted on 25 Sep 2023
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Android
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That's fair, but it might also just be that they think taking a small loss on providing the watch will boost sales of the phone for people who wouldn't have gotten it otherwise, will also increase market share, and look better in reporting. If you weren't going to get a pixel watch, but one came for free and you use it, now you become a watch user for their stats. Additionally, it further entrenches you in the Google ecosystem and familiarizes you with the product so you might end up purchasing the next generation. Also, it helps normalize this product amongst your peers. Completely understandable for Google to possibly take a loss, not that they definitely are. I have no idea what the actual cost versus price looks like.
not to mention that the bundle could potentially convince people to finally switch to android ecosystem, making google earn more from the play store purchases.
I don't know how I overlooked possible App Store purchase increases. Good point!