Google doesn’t have extensive expertise in hardware manufacturing, but it does have a powerful brand. Despite its best efforts to make a big splash in the smartphone market with Pixel phones, Google sold only a tiny number of devices in 2017. The search engine giant’s smartphone sales doubled in 2017 compared to 2016. That seems like a huge growth rate, but consider this: The original Pixel launched in October 2016, which means it was available only for three months of that year. In contrast, the Google Pixel and Pixel 2 handsets were available for all of 2017.
You can’t argue with the fact that Google’s Pixel 2 phones have the world’s best smartphone camera, even better than the iPhone X. The Pixel phones were supposed to be Google’s answer to Apple’s iPhones. By designing its devices in-house, Google was able to tightly integrate its software and hardware, just like Apple does. But Google shipped only 3.9 million Pixel phones in 2017. That’s double the number of units shipped in 2016, but is nothing more than a rounding error in the global smartphone sales of 1.5 billion units in 2017.
The data comes from IDC’s research director Francisco Jeronimo, who said the Pixel devices “continue to grow.” The numbers suggest that Google still has a long way to go before it can challenge the iPhones. Let’s talk about numbers. It took Google a full year to sell 3.9 million Pixel phones. Apple shipped 216.7 million iPhones in 2017 and Samsung sold 316.4 million smartphones in the same period.
There's a gold rush coming as electric vehicle manufacturers fight for market share, proclaimed David Einhorn at this year's 2021 Sohn Investment Conference. Check out our coverage of the 2021 Sohn Investment Conference here. Q1 2021 hedge fund letters, conferences and more SORRY! This content is exclusively for paying members. SIGN UP HERE If you Read More
— Francisco Jeronimo (@fjeronimo) February 12, 2018
Quick math shows it took Apple just 6.5 days and Samsung only 4.4 days to sell the same number of smartphones. Also, ZDNet points out that Apple, on average, sold 3.9 million iPhones in just 4.6 days during the holiday quarter. The Cupertino company had shipped 77.3 million iPhones in the holiday shopping season.
If sales figures are anything to go by, the Pixel phones are no different than the Nexus line. Most Android customers still prefer Samsung’s and Chinese vendors’ devices that are loaded with bloatware. Pixel’s user base mostly consists of hardcore Android fans who want the pure Android experience. The search engine giant recently acquired part of HTC’s smartphone business for $1.1 billion, which should help the company strengthen its hardware presence.
There are many reasons why Google’s smartphone sales are so poor, even though Pixel phones have been praised by critics. One is that the company entered the hardware scene pretty late. Most people in the premium segment, which the Pixel phones target, have already become loyal to Apple, Samsung, or another brand. Another reason is that the Pixel 2 handsets suffered from a variety of display-related issues at launch, which affected its sales during the holiday period.
The third reason is that Google doesn’t have a strong retail presence. In the US, 90% of smartphones are sold via wireless carriers. Google sells Pixel phones only through Verizon and its own website, leaving out AT&T, T-Mobile, and Sprint. Carrier deals make a huge difference in a country where almost all phones are sold via carriers. Chinese vendors such as Huawei and OnePlus have been unable to penetrate the US market primarily because they haven’t yet succeeded in striking deals with the US carriers.
Even HMD Global, which began selling Nokia-branded smartphones last year, sold more phones than Google. According to data from TrendForce, HMD sold 4.4 million devices during the holiday quarter alone. For the full year 2017, HMD Global produced 11.5 million units. TrendForce expects its sales to jump more than 70% this year to surpass 20 million units. In fact, Apple and HMD Global will be the only major vendors to see an increase in sales this year as the smartphone market matures. HMD is now the world’s sixth largest smartphone vendor.
Google could improve its position with the launch of Pixel 3 later this year. According to the rumor mill, the company is planning to launch three smartphones in 2018, consisting of two premium devices and a high-end model. If it pans out, Google’s 2018 lineup will look a lot like Apple’s 2017 line, which included the iPhone 8, 8 Plus, and a high-end iPhone X. Recent reports suggest that Google would borrow the iPhone X’s notch for its upcoming Pixel phones.
The Pixel 3 devices are expected to hit the store shelves in October 2018. We expect them to feature wireless charging, a bezel-less OLED display, an IP68 rating for water-resistance, and the Snapdragon 845 processor. Both the original as well as last year’s Pixel phones lacked an inspiring design. It would be interesting to see how Google differentiates the design of its upcoming phones from that of rival offerings.