Google has a simple but subtle reason for the expected push into the midrange smartphone market: there is too much competition in the high-end market.
Next month, on the first day of the I / O Developer Conference, Google is expected to launch its new, cheaper Pixel 3a and 3a XL. Ruth Porat, chief financial officer of Google's parent company Alphabet, said in a profit-making interview with reporters that industry-wide printing on high-end phones in the last quarter resulted in fewer pixel sales than a year ago. Porat explicitly cited "some of the recent pressures on the premium smartphone market."
Maybe it's not a great idea to make phones worth more than $ 1000?
– Janko Roettgers (@ jank0) April 29, 2019
While Porat has not stated exactly what kind of pressure it is, we can assume that it is due to the fiercer competition from Apple and Samsung and high prices, which pushes down consumer demand, and leads to smartphone owners staying longer than their devices on the market, annual update cycles to which the mobile industry has committed itself.
In a separate section of the appeal, Google boss Sundar Pichai was pressured to see if investors were worried that the company's hardware efforts would have little impact on total revenue, which was still heavily impacted by the slowdown in advertising business is dependent. One analyst wondered openly if the pixel line was representative of Microsoft's failed smartphone business.
Pichai was also hammered on Google's hardware, which was not a significant revenue over ads – especially as the ads slow down. One analyst even asked if we had another Microsoft in our hands (!). (Pichai was defensive, said Google is long-term committed, but eek.) Https://t.co/4qTGvfOqHM[19459003-Ingrid(@ingridlunden) April 29, 2019
Google does not break in the quarterly earnings reports While sales of its hardware-related products have been on the rise, the segment continues to grow despite the lackluster phone sales and generated nearly $ 5.5 billion in sales last quarter. This could be due to increased sales of Chromecast devices, laptops, Google Home speakers, and Nest products, as well as various other physical devices that Google now uses.
The Pixel 3, which came with a lower price than flagships from Apple and Samsung, and was equipped with a best-in-class camera, launched at $ 799 and came in variants that price 999 $ went up. Less than nine months after the device's launch, you can now purchase a brand new Pixel 3 or Pixel 3 XL for $ 200 from Google's online store. And what's more than a coincidence, the deal ends just before the start of Google I / O.