Re: nothing like pissing off your friends
"Can they continue to sell the Pixel at iPhone prices? Can they beat Apple at their own game?"
Probably not. Apple won't be able to maintain their prices either, more than likely.
Smartphones are a commodity now. If the PC business is any indication (and I think it is), when tech becomes a commodity, the Chinese take over and the margins fall through the floor. We can already see the beginnings of this with phones from ZTE (like the Axon 7 mentioned above), Huawei, Oneplus, etc. They've got phones that do most (meaning the vast majority of) tasks just fine for prices starting at 2/3rds less and going down from there.
Apple and Google might get some traction from status since smartphones are something you carry with you and can wave around smugly, but I doubt that will last long.