I wouldn't argue against the $799 figure - but it'll shock me if it's not within that $699-799 range.
A few things to note regarding the processor:
- We don't know whether Google's first processor is intended to be competitive at the midrange or top tier of performance, the former making it more affordable and the latter less so
- In designing their own chips, they are not paying the markup and licensing to Qualcomm, so there is potentially a great deal of savings there
- We don't know the scale of production these will see. Presumably they will be at a minimum utilized in Pixels and some Chromebooks - and possibly tablets, smartwatches, smart TV's, cars, etc... The wider the net is cast in terms of devices using them, the lower the per-CPU cost (and of course, the narrower, the higher).
My $699 guess assumes that general build will be similar to what was used in the 5 (other than camera, processor), with some incremental gains, allowing Google to retain a pricing competitive with where the basic iPhone starts. I could see $799, but I can't fathom their going a penny higher than Apple is asking for their basic (not mini) iPhone.