Google has announced two new smartphone models, Pixel and Pixel XL, which include:-
- Only Google branding, unlike the co-branding with a hardware partner on Nexus smartphones.
- Snapdragon 821 chipset, 4GB RAM.
- Google Assistant, the first smartphones to do so.
- Daydream VR compatible.
- 12MP camera, f2.0, 1.55 micro pixels.
- 32GB or 128GB storage.
- 24x7 customer care support with screen sharing
- 5” 1080P display or 5.5” QHD display.
- Automatic background OS updating
- Unlimited cloud storage bundled
- Channel partners include: Verizon, Best Buy, Rogers, Telus, Bell, Wirelesseave, T-Mobile, Telstra, JB Hi-Fi, Reliance, croma, Flipkart, EE, Carphone Warehouse
As well as:
- Daydream VR headset, price $79, available November.
- Google WiFi, home access point, $129.
- Chromecast Ultra, update with 4K, Dolby Vision, and HDR support.
- Google Home, an Amazon Echo competitor, price $129.
With the Pixel smartphones, Google is finally completing its creeping ‘proprietization’ of Android. Now, Google has dropped use of its hardware partner brand and offers smartphone models with unique innovations not yet available to partners.
Pixel smartphones represent the culmination of Google’s ongoing moves to take ownership of Android. Launched initially as an almost entirely open source operating system, Google has over time moved more and more apps and Android software elements into a proprietary Google license.
Despite Google’s creeping control of Android, smartphone makers have few alternatives
Google is choosing the right time to make a move for fully own-brand smartphones. Launching own-brand smartphones will undoubtedly antagonize Google’s Android hardware partners, but they have few alternatives because the success of Android has prevented any other licensable mobile operating system from establishing itself.
All the competition is either dead (Firefox OS, BlackBerry 10, Symbian, MeeGo), dying (Windows 10 Mobile, Sailfish) or a niche (Tizen). Smartphone makers do have the choice of forking Android or using Samsung’s Tizen, but both would be costly and risky to develop, and only the largest smartphone makers could afford the investment.
High Pixel prices will limit Pixel sales & hurt Daydream VR uptake
Google is demonstrating true courage by offering its first own-brand smartphones at the same starting prices as premium segment market leader Apple, $649 for the Pixel 32GB and $749 for the Pixel XL. IHS expects Google’s Pixel smartphones to struggle at this price because Google lacks the brand awareness and capabilities as a hardware maker of Apple, or Samsung.
These high price points will hurt initial adoption for Google’s fledgling Daydream VR platform. IHS believes Google should have been more aggressive with Pixel smartphone pricing to help to establish Google’s VR platform ahead of rivals at a time when there is no clear VR market leader. In retrospect, Google will see this as a lost opportunity.
If Google decides, it can easily drop the initial Pixel prices. But even at a lower price point, having excellent smartphone hardware and Google’s software is not sufficient for smartphone market success.
Google must build an organization to drive adoption across channels, incentivize both mobile operators and retailers, and essentially learn the channels country-by-country and replicate the hard won knowledge of Samsung, Apple and in the past of Nokia, Motorola or Sony. This will take Google time which will provide a window for rival smartphone makers such as Samsung or Huawei to adapt their strategy to counter Google. The long list of retailers and mobile networks which Google is working with prove Google understands the need for channel relationships.
Google Assistant is the signature feature of the Pixel smartphones and other devices
The choice of Google’s own name for Assistant demonstrates how important AI is to Google, as Google stated today, its strategy is “AI First.” The smartphone is a uniquely important part of Google’s AI strategy because of the extent to which consumers use smartphones 24x7 and hence the quantity of personal data they generate to help Google Assistant to work. By contrast, other companies have created specific names for their Google Assistant competitors: Apple's Siri, Amazon's Alexa or Microsoft's Cortana rather than using their company brand for their intelligent agent.
Use of devices including Google Assistant furthers Google’s twin strategy:
- Build smarter services. Capturing usage information about Google hardware owners both delivers immediately smarter experiences for an individual user based on their interests, locations and activities and at the same time adds to the vast pull of data across many users which Google will use as training data for large scale deep learning and even smarter services.
- Deliver more focused, more valuable advertising. The same deep learning and user profiling used to create smarter services helps advertising to be aimed more accurately, increasing value to advertisers, and driving Google’s revenues.
Google’s partners will look again at alternatives to Google’s Android
Google is pursuing a similar integrated hardware-software strategy to Apple with Pixel smartphones, Daydream View, and the other new hardware Google has announced. This is the final defeat for the operating system licensing model which Microsoft pioneered, and everyone tried to copy before Apple’s iPhone success.
But Google’s culture and deep learning, intelligence, organizational, and software competitive strengths are very different to Apple. Yet, with Pixel smartphones Google is aiming at the same competitive areas which Samsung and Apple are: camera quality, cloud storage, and the ease of experience. Google needs to differentiate based on its competitive strengths around AI, but Google Assistant needs to be on as many smartphones as possible to support Google strategy and so cannot be a long term differentiator for Pixel smartphones.
Google still has many smartphone hardware partners, unlike Apple, and it continues to need them. Because if not, Samsung may ramp its fall-back TIzen OS strategy, and more significantly Google’s many China headquartered smartphone maker partners may fork Android and take their more proprietary Chinese Android variants into international markets.
Android may be dominant now, but it’s not invincible if Google makes the wrong strategic moves and undermines its ecosystem partners.