New Pixel Launch Poses Questions On Google’s Smartphone Endgame

Google, now a unit of parent company Alphabet, this week unveiled the latest iterations of its Pixel smartphone range, the Pixel 3 and the Pixel 3XL. Reviews of the smartphones have been positive and its camera is considered a particular standout with a majority of tech journalists rating it as the best to date for a smartphone.

However, with Google seemingly not even attempting to compete with Apple and Samsung on market share, evidenced by the fact Pixels are only available in some countries and few a select group of carriers, the question that was first asked with the launch of the original Pixel in 2016 remains. What’s Google’s endgame in the smartphone hardware market?

Until the Pixel Google was very much focused on its Android OS in terms of its positioning in the smartphone market. And it has been very successful in dominating the OS space. Statista data indicates that in Q2 of 2018, Android was the OS used by 88% of the smartphones sold worldwide. Apple’s iOS accounted for 11.9%. That leaves a tiny 0.1% of smartphones that are not iPhones running on an operating system other than Android.

So why confuse the model by entering the hardware market too? Google does not heavily market or distribute Pixel smartphones as a conscious strategy of avoiding cannibalising too much of the business of other hardware makers that use Android, such as Samsung, Huawei and HTC. So if an assault on market share is not the point of putting so much effort into a handset that is considered a match for the iPhone and its best Android competition, what is? A recent article in The Verge addresses the question and puts forward a handful of suggestions as to why the Pixel is important to Google in ways other than sales revenue. These are:

The Pixel is a Google and Alphabet Statement of Tech Authority
Google has given the Pixel 3 and Pixel 3XL the best camera ever possessed by a smartphone to position itself as the world’s leading tech company. Apple may sell tens of millions more iPhones than Google sell Pixels, but the Pixel, by virtue of its existence not sales numbers, says ‘Google can make a better smartphone camera than Apple’. The Pixel is a symbol of Google’s position as a tech leader and being part of the conversation as ‘the best’ smartphone camera on the market is worth more to it than trying to be a leader in market share of smartphone sales. The latter would also have the negative impact of the company becoming a serious direct competitor of the other smartphone makers that use Android, which would be a conflict of interests.

The Pixel Showcases Android In The Best Possible Light
The iPhone’s success has been based on the perfect alignment of hardware and software with the iOS developed specifically for the iPhone hardware and the iPhone hardware developed specifically for iOS. The result is a seamless user experience and Google’s Pixel is able to take the same route by showcasing the optimal Android user experience. By doing so, Google is positioning itself for a potential future rivalry with Apple by also gaining experience in manufacturing a smartphone over which it has complete control.

This has a range of advantages. Firstly, if other manufacturers of Android smartphones match the Pixel configurations, it slashes their costs and difficulty when it comes to configuring the hardware for Android. App makers can also more easily built for a more standardised Android OS to hardware match-up if other smartphone models adhere to some of the standards the Pixel represents.

In combination, that’s why the significance of Google’s Pixel range is much, much more than sales numbers.

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