Google is ‘Doubling Down’ on Pixel Phones Amid Uncertain Market Conditions

Despite many ups and downs over the years, Google has continued with the Pixel brand. And this is a company which has a proven track record of pulling off things early, like we recently saw with Stadia. This tells us two things, one that Google doesn’t want to quit the hardware game, and the other that Pixel smartphones are at the core of the company’s plan moving forward. 

According to a new report from The Information, Google is apparently doubling down on its Pixel phone lineup, and other in-house hardware. To that end, the company has shifted product development and software engineering staff to work on features for Google’s in-house products rather than for the broader Android ecosystem. 

With this, Google can potentially upset its relationship with phone manufacturers who solely depend on the company for the Android software. Phone manufacturers have a very delicate relationship with Google, and it mainly relies on them getting a feature-rich and fairly customizable OS, and in exchange they ensure Android users have almost complete dependence on Google’s services, such as Maps, Gmail, YouTube etc.  

These twin developments, which threaten Google’s mobile ads business, have prompted the tech giant to take a big gamble. It is doubling down on investment in its own hardware, including its Pixel phones, including by moving product development and software engineering staff working on features for non-Google hardware to work on Google-branded devices, according to an internal document viewed by The Information.

– Excerpt from Facing Threat From Apple, Google Tries New Hardware Playbook — The Information

One of the biggest reasons for Google’s new outlook comes from Samsung’s recent lackluster performance in the Android market. The company has been consistently losing market share in the premium category ($400 and up). According to Counterpoint research Apple had a premium smartphone market share of 57% by the end of second quarter in 2021 which is a significant increase from 48% just a year ago. On the other hand, Samsung’s premium market share came down to 17% in Q2 2021, from the earlier 22%. 

You might think, how would Samsung’s performance affect Google’s bottom-line? Well, Samsung is one of the biggest Android vendors in the world, and thus selling less units means there are less users for Google’s own services. And even worse, losing share to Apple means that there is a net influx out of Android, in general. 

Google already has a hiring freeze in place, and the company is also reorganizing internally to make it more efficient. The US, and the world is general is also going through an economic downturn, and that is showing up in the quarterly results of most of these tech companies. And in such market conditions, companies try to minimize risk and go after things that are likely going to pay off in the short term.

As Google grows concerned that its partner Samsung is losing customers to Apple in mature markets, CEO Sundar Pichai believes Google investing more in its own devices “best positions the company to be protected,” a senior executive said.

– Excerpt from Facing Threat From Apple, Google Tries New Hardware Playbook — The Information

Doubling down on Pixel hardware in general can be a relatively low risk bet. The company doesn’t really advertise the phones much, and often there’s a very limited launch and the phones often don’t show up in markets outside Europe and North America. Recently, Google announced that the Pixel 6 along with the Pixel 6a, has been the company’s fastest-selling phones to date. Google can easily capitalize on the momentum and try and expand market share for its in-house Pixel devices.