Google is all set to take a dive into the mid-range smartphone market, after it suffered a big drop in the annual sales of its flagship Pixel models. Google attributes the reason for reduced Pixel sales to high competition in the Indian smartphone market, with the likes of Apple, Samsung, Xiaomi and others reigning the high-end smartphone kingdom.
There are no official dates out yet as to when Google will unveil its mid-range smartphone segment, but, it is expected to show off the new Pixel 3a and Pixel 3a XL models next month at the Google I/O developer conference.
According to 9to5Google, Pixel 3a will feature a 5.6-inch display with a 2016X1080 resolution, powered by a Snapdragon 670 processor while the Pixel 3a XL will come with 6-inch diplay with 2200 X 1080 resolution and a Snapdragon 710 processor. Both these handsets will be operating on Android 9.0 pie. Also, the camera performance for the phones is being claimed as nearly similar to the flagship models with poor ‘camera app performance’. With the new mid-range models on their way, it seems that Google’s decisions to diversify and experiment with its smartphone range, might be just what it needs to keep pushing itself forward in the competitive smartphone market.
“Hardware results reflect lower year-on-year sales of Pixel, reflecting in part heavy promotional activity industry-wide, given some of the recent pressures in the premium smartphone market”, said Ruth Porat, CFO, Google during the Q1 2019 earnings call. Porat didn’t elaborate on what these pressures might be, but it’s not hard to guess. Moreover, Google has already reduced the price of its brand new Pixel 3 and 3 XL by $200 on its online store.
The fact that companies such as Apple and Samsung had already established themselves as the “IT” phones, way before Google Pixel even came into play, meant that these core brands already had a competitive edge over Pixel. People would much likely prefer an iPhone XR over the similar-priced Google Pixel because the brand value and reputation of iPhone superseded that of Google Pixel 3.
Not to say that Google Pixel isn’t a great smartphone range, but with the current smartphone market being too saturated, it takes a lot for smartphones to stand out among the others in the public eye. Although, the phone always had an up-to-date software, many users had complained about Google’s Pixel 3 ugly notch and an overall outdated design, making it a big turn off. This makes sense since most people who decide to shell out a lot of money on a phone, want it to be a total beauty, from all angles. Also, Google Pixel hardware wasn’t all that too die for, with its camera , being the core feature that stood out.
Google Pixels are good phones. But they do not sell in significant numbers, not because Google has not driven distribution and not put hundreds of millions/billions of dollars behind them. On the contrary, at one point, Samsung was spending close to $10 billion on phone marketing.
Another reason leading to a drop in Pixel sales can be attributed to the fact that Apple is (almost) the king of marketing when it comes to its product launches, and manages to generate a lot of buzz every time.
One of the participants during the earnings call, asked Pichai to elaborate more on the hardware business, stating that, “there is some concerns that it’s just not getting off to really strong trajectory, some comparisons to Microsoft 10 years ago. Really, just help us understand how that hardware business is important to Google and how you are thinking about it long-term?”.
However, Pichai partially dodged the question, saying that Google is in its ‘early days’ but its ‘commitment is strong’. “Phones, definitely, across as an industry, I think, they are working through a phase where there is definite year-on-year headwinds. But I do think, especially, the ecosystem is constantly pushing it forward”, mentioned Pichai. The overall hardware revenue Google generated in the past quarter amounts to $5.5 billion, but it’s hard to say the total contribution that was made by the smartphone sales to that figure.
Now, although Google Pixel flagships model failed to reach the set annual sales target, the upcoming mid-sized phones might manage to change that. For now, all we can do is wait for the launch of the new Pixel phones before we reach our verdict!