To be fair, the Pixel is a horrible value, as it doesn't seem to be as significantly better than what it's replacing relative to the significant increase in price.
To me, the difference between a $1000 phone and a $400 is less than $1 per day (I keep my phones for 24 months). A buck a day is something I can afford and am willing to pay it for even a modestly better phone. I would guess a lot of HN readers are in a similar position.
I wish Google would have come out with something much better even if it would have been more expensive than an iPhone.
Certainly there are plenty of people for whom it is significant. You could just as easily say many have their smartphone fully paid for by their employer so it doesn't matter. When I paid for my own smartphone before, I got a Moto G (80% as good as a phone many times as expensive). Now that my employer pays, I got a more expensive phone that I like only marginally better than my former Moto G (and I miss some things about the G). However, plenty of people are not in that situation, and plenty of people notice the $500+ difference.
Yes there are plenty of people that can't afford it, but I was mostly talking to HN readers. $1 per day is something that most of us can afford. Verizon will sell you an iPhone 7 Plus for $32 / month. For sure it's a luxury item, but it's within reach.
If a Moto G is good enough for you, then great! You have sixty five cents per day that you can spend on other things.
$600 is a vacation, or more than a week's pay after taxes for me. Why would I pay $600 extra for a phone that isn't that much better? Just because you can doesn't mean you should.
Hell, $600 can feed a family of four for several weeks.
If you are deciding between feeding your family or getting a phone, by all means, feed your family.
All I'm saying is if you have a little disposable income ($1 / day) then for many people a better phone is worth the price difference. I think it's especially true when you think about how many hours every day people use their phones. I can get by just fine with a 4-year old PC, but having to use a 4-year old phone would suck.
There is value in looking at amortized price, but keep in mind many people (esp. fans) upgrade more frequently than 24mo. For them the cost differential is much sharper and more frequent.
Also add in the fact that unlike on the Apple side, most of the Android customer base can simply wait a few months or even weeks and get a much better price (see: most LG phones based on my research), or the same specs from a different manufacturer.
Upgrading annually is still within reach for most people, especially if they are enthusiasts. It costs around $2 per day if you want a new phone every year.
Your Android comment is spot on. I'm wary though of comparing specs because that can be misleading. A couple of phones ago I had a OnePlus One which looked marvelous on paper and it ended up being a terrible phone.
To me, the difference between a $1000 phone and a $400 is less than $1 per day (I keep my phones for 24 months). A buck a day is something I can afford and am willing to pay it for even a modestly better phone. I would guess a lot of HN readers are in a similar position.
I wish Google would have come out with something much better even if it would have been more expensive than an iPhone.