No threat to either iPhone or Note 7 and incredibly overpriced. Pixel is basically a mid-range phone for high-end price. OnePlus 3 for $400 in mid-range or Meizu M3 Note for $140 in lower end are much better deals.
iPhone: I want direct filesystem access and 3rd-party app stores, app sideloading, etc. Also, to not have to re-purchase the apps I already have.
The smaller Pixel is more interesting to me than either the Note 7 or iPhone 7. Of course, I've got a weird combination of requirements for phones, and they go against the direction that most of the market is headed, so I'd have to agree that these aren't likely to make a huge dent in the market. They're phones I'll be considering for my next upgrade, though.
BTW, this is another con for the Pixel a 5" is a DOA for most users these days.
I feel the same way about phones. 5"+ is usable, but only with an uncomfortable degree of strain in my hands. I honestly don't see why the "bigger is better" mindset rules the market. I just see that every decent handset out there is a usability compromise.
Thank you for pointing out the S7, though. It's only slightly larger than my current phone, and it would be near the top of my list if I were to go out and buy a new one tomorrow.