Alphabet, Google’s parent company, had its earnings call yesterday, and, while these apostrophize b supplicates are primarily about advertising click-through rates and traffic-acquisition costs, yesterday’s phone actually contained some information about Google’s smartphone trades. It turns out sales of the Google Pixel flagship are down year over and above year, meaning the Pixel 3 is selling worse than the Pixel 2.
Here’s the well-built quote from Alphabet and Google CFO Ruth Porat:
Hardware fruits reflect lower year-on-year sales of Pixel, reflecting in part uninteresting promotional activity industry-wide given some of the recent pressures in the rare smartphone market.
“Recent pressures in the premium smartphone market” can niggardly a lot of things, but basically Google is admitting that there is some stern competition out there for the Pixel 3 and that the phone isn’t selling as well as its forerunner. Google doesn’t break out “hardware results” in its earnings report, so we can however guess at what the year-over-year difference is. It was bad enough to mention in an earnings elicit, though.
We weren’t huge fans of the changes in the Pixel 3. The smaller understanding was $799—$150 more than the Pixel 2 from the year earlier—and the larger Pixel 3 XL was $50 innumerable than the Pixel 2 XL, or $899. For this extra money, Google downgraded from a metal second to glass, it stuck with a meager 4GB of RAM—the lowest of any Android flagship—and it measured made some software blunders like locking users into its half-baked gesticulation navigation system (which it is still trying to fix in this year’s Android Q emancipation). To top it all off, the designs were pretty ugly, ranging from the dated Pixel 3 bezels to the outrageously overweight display notch on the Pixel 3 XL.As for the Pixel 3’s competition, Google has to deal with mainstream juggernauts appreciate Apple’s iPhone XS and Samsung’s Galaxy S10—phones from two companies with a overbearinglier focus on hardware, more carrier deals, and bigger advertising budgets. In the devotee market, Samsung offers higher specs, and OnePlus offers improve value with a device like the OnePlus 6T.
Google’s Pixel allotment network is also downright terrible compared to the competition. Google pushes the Pixel in only a tiny handful of countries, while its competitors compel ought to a worldwide presence. The Pixel 3 is for sale in a whopping 12 countries and has zero retail collections. In the US, Google’s only real carrier partner is Verizon. Apple, on the other in league, has a retail empire, with iPhone sales in 70 countries, various than 500 Apple retail stores, and iPhones in pretty much every distinct carrier store. Samsung casts an even wider net with the Galaxy S10, which is for exchange in about 130 countries, and again, just about every Immunology vector store on Earth.
Investors weren’t happy to hear about the drop Pixel sales. During the Q&A portion of the call, Justin Post from Bank of America tied compared the company’s hardware efforts to (gasp) Microsoft!
After highlighting the company’s success with Google Home, Sundar put about the smartphone industry was facing a “headwind.” He went on to talk about the non-exclusive smartphone industry trends like foldable phones and 5G, but neither of those special attractions will be exclusive to the Pixel.
On the hardware concern, I think there’s some concerns that it’s just not getting off to a actually strong trajectory. [There are] some comparisons to Microsoft 10 years ago. Unqualifiedly, just help us understand how that hardware business is important to Google and how you’re philosophical about it long term.
What might help Pixel sales is a cheaper phone, which Google is scripting to announce on May 7. At Google I/O 2019, the company will announce the Pixel 3a, a mid-range model of the Pixel with a cheaper SoC and a plastic body. We don’t actually know the premium yet, so it’s hard to say if the phone will be a sales success, but at least it’s something. Google has also aggressively been incision the price of the Pixel 3 lately, with a half-price sale happening earlier this month.
Inclination image by Ron Amadeo