Google’s curious Pixel phone strategy

Nikkei Asia reports on Google’s modest Pixel 5 phone goals:

“Google plans to produce less than 1 million Pixel 5 smartphones this year, sources told Nikkei Asia, signalling a far more conservative outlook for the internet giant’s flagship device than last year.

“Production could be as low as around 800,000 units for the 5G-capable flagship smartphone…”

The Pixel 5 runs Android 11. It supports 5G networks. There’s a six-inch screen, two back cameras; a 12.2 megapixel main camera and a 16 megapixel ultra wide camera. There is a cheaper Pixel 4A model.

A phone that waits in hold for you

One of its features allows you to have Google Assistant wait on hold until a human picks up the phone at the other end.

If Google has plans to sell the Pixel 5 in New Zealand, it is keeping quiet about them. Parallel importers have brought in previous models. The international price is US$700, which translates to around NZ$1300 or $1400 here.

This will be a rough year for phone makers. Yet if the Nikkei report is correct, Google’s own brand models will be a rounding error for the market.

Let’s put the number in perspective. Phone makers shipped 295 million phones in the second quarter of 2020.

A rounding error

Even the most bearish observers expect to see more than a billion units sold during the full year. On those numbers Google won’t account for 0.1 percent of the total.

Samsung, which like Google uses Android, should sell more than 200 million phones. Huawei, which can no longer use Google services expects to sell a similar number.

As the Nikkei story points out, Google’s phone making suffered in the Covid-19 pandemic. But then every phone maker hit the same problem.

The Pixel phones are oddballs. In the US a single carrier, Verizon, lists them. Americans are more inclined than people elsewhere to buy their phones from carriers.

Not a phone business

For Google, phones represents a tiny slice of the business. They don’t need to make money. Pixel phones are more about Google showcasing technology. It’s no accident the wait on hold feature appeared first on a Pixel phone.

They serve to put pressure on other phone makers to continue innovating.

Google may want to keep a toe-hold in the market for strategic purposes. For now, Pixel is not mission critical at Google. It’s a hedge against a possible future.

Phones are mission critical for the big brands: Samsung, Apple and Huawei. For those companies, phones are central. They provide cash flow, and, all being well, profit.

Google’s goal is to push as much traffic as possible through the company’s data collection, if you like, surveillance, services. Pixel helps keep that on the boil.

The company has deep enough pockets to push the button and ramp up production. It may do that one day if it is necessary. Pixel means if that happens, Google won’t be starting from a long way behind the pack.