Topps Blog: Google Pixel Phones : Yet Another Shot in the Dark?

It’s hardly a secret anymore that Google is going to launch the Pixel smartphones later today at their annual event along with a host of other hardware products such as Google Home, an upgraded Chromecast and DayDream VR. There are two Pixel smartphones slated to launch today. The Pixel brand was something that Google used for its top of the line Chromebooks that it made in-house, and now the same brand name is being used for smartphones. The Pixel phones have the entire tech industry interested but before we get more excited about them, it’s worth analyzing the kind of impact it would be able to make in the long run.

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This isn’t Google’s first smartphone

The Pixel smartphones aren’t quite obviously Google’s first shot at the smartphone market. There have been lots of other attempts and many of them have hardly made much of an impact. let’s have a look.

Nexus

The Nexus was probably Google’s first shot at the smartphone market. Initially, Nexus smartphones were positioned as premium offerings, then morphed into bang for buck smartphones and later on they were back as premium smartphones. It’s widely rumored that Google would kill the Nexus lineup this year and replace it with the Pixel smartphone lineup. Even if the Nexus lineup is to be killed this year, the Nexus has arguably been Google’s longest running bet at the smartphone market. From the Nexus One to Nexus 6P, there’ve been at least eight Nexus smartphones that Google has released.

nexus-lineup

Despite releasing eight Nexus smartphones, none of them ever had any significant impact on the smartphone market. Volume and market share wise Nexus was never really big. I don’t think Google has ever disclosed the number of handsets it managed to sell for any Nexus variant. The only information about Nexus sales we know is that the Nexus 5 was the best selling of them all. As far as I remember, Nexus 5 never made it to the top 10 selling smartphones worldwide in terms of volume even after a year after its launch. Needless to say, in terms of volume, the Nexus brand was never big.

nexus-estimate

Many would argue that the aim with Nexus was to never make it big but to represent Google’s vision for Android. I would agree with that but you would really have to think whether the Nexus brand has really helped spread Google’s vision of Android. To start with, the Nexus always received timely software updates and security patches. If Nexus were to have any impact, other manufacturers would have also improved their software update times, but the harsh reality is that it takes forever to come or in most cases, don’t see the light of the day. Similarly, Nexus phones only came preloaded with Google apps and stuck with the stock UI. But most smartphones today are still preloaded with bloatware and custom skins are still popular.

Motorola

Google had bought Motorola to beef up its patent portfolio in defense of Apple. Although Google maintains that the primary reason behind buying Motorola was its patent portfolio, the smartphone unit also came along nonetheless. Initially, the smartphone unit of Motorola wasn’t that great. But later on, when Motorola released the Moto G, somewhere during late 2013, it turned out to be an unexpected hit. The Moto G had single-handedly set the trend of “online-only” smartphones in India and followed it up with the Moto E which took the same recipe of Moto G’s success and won as well.

I honestly feel that Motorola has had the maximum impact amongst all of Google’s smartphone initiatives, even though Motorola under Google lasted much lesser than Nexus, it actually managed to change the Indian smartphone market. With Moto G and Moto E being hits, Motorola had in a way proven that it’s possible to do well in the Indian smartphone market by just partnering with online e-commerce portals and not having any offline retail presence which takes years to build out thoroughly. Apart from this, the e-commerce portals were eager to boost their GMV metric and smartphones were the easiest way to do so. Considering that smartphones would play a pivotal role in boosting GMV, e-commerce firms were more than willing to throw in free marketing and in some cases go as far as to subsidize the smartphone’s price to some extent.

The Chinese manufacturers saw Motorola’s success with e-commerce in India and jumped on board. Soon Xiaomi launched in India and ever since then a slew of manufacturers like OnePlus and LeEco came to India using the “online-only” model. These “online-only” smartphone brands have increased competition to such an extent that even offline brands such as Samsung and Micromax were forced to provide better specs for lesser prices. Micromax in fact even spun out an online-only subsidiary in the form of YU televentures. All in all, Motorola had done a great job at improving the competition in the Indian smartphone ecosystem. Apart from Moto E and Moto G being run away successes, the Moto X was probably the first ever Android smartphone that prioritized user experience over specs.

Google had a great thing going on with Motorola and although Motorola was losing money, it isn’t uncommon for Google’s other divisions like Verily Life Sciences, Google Loon etc to lose a lot of money. But suddenly out of nowhere did Google decide to sell Motorola to Lenovo. Although Google kept the patents, the smartphone business was sold off to Lenovo.

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Google has a money minting search advertising business, the company’s various divisions can afford to lose some money and try and experiment with things. For example, the decision to go “online-only” was mostly a bet by Motorola at India, no one knew whether the online market was big enough or whether people would buy smartphones from a brand that had unceremoniously exited India a couple of years back. The bet ultimately paid off and helped revive Motorola. Lenovo, on the other hand, is mostly a PC manufacturer that operates at razor-thin margins. Lenovo has already cut a lot of staff from Motorola and wouldn’t be able to afford to experiment much.

Google had a great thing going on with Motorola, it’s unclear why Google decided to sell it to Lenovo when Moto was at its peak. The only reasonable explanation is that with Motorola, Google became both a licensor of Android as well as a licensee. Motorola’s continued improvement in performance would have soured Google’s relationship with others like Samsung and LG which is why Google might have decided to sell it off.

Android One

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Android One was Google’s attempt to bring a low end Nexus for emerging countries. When it started off, there were high ambitions for Android One. Unlike Nexus, it wasn’t limited to one particular smartphone manufacturer. Anyone interested could jump on board and be a part of the initiative. The biggest draw of Android One was arguably its timely updates delivered straight from Google. However Android One never made it big.

When the Android One initiative landed in India for the first time, it received a pretty good response. But for the second generation of Android One devices, only Lava came to partner up with Google. After the launch of Lava Pixel V1 in July 2015, no other Android One handset was launched in India. The project is considered pretty much dead in India, while barely surviving in other markets like Indonesia. Just like Nexus, even Android One wasn’t big in terms of volumes. And much like Nexus, it never had any material impact on the smartphone ecosystem. Low-end smartphones don’t get software updates most of the times and most Chinese companies like Vivo continue using custom skins that make it difficult to figure out whether the phone is running Android or iOS.

Project Ara

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Project Ara was Google’s ambitious project to bring about modular smartphones. If your battery has stopped working, just swap it. If you need a better camera for the upcoming trip, just swap the module. The Phone feels slow? Add some extra RAM or swap the processor. The concept was very promising. It would put to an end the constant need to upgrade a smartphone every two years. It would reduce e-waste and no longer would you have to leave your smartphone at the service center for weeks when something goes wrong. Many people had expressed their doubts initially whether Ara would be successful, after all, smartphones are one of the most tightly integrated electronic devices and unbundling them was no easy task.

Some hope was given when Project Ara was demoed at Google I/O 2015. There was a developer version of Project Ara that was once again demoed at Google I/O 2016. People started having really high hopes that Ara might soon one day be a reality despite the initial skepticism surrounding the project. On 2nd September 2016, Google announced that it had axed plans to create a modular smartphone.

The loss of Project Ara was yet another setback in Google’s already troubled smartphone journey. The Nexus didn’t have any impact, same goes for Android One. Motorola was doing well but was sold off to Lenovo, and now Project Ara had also gone down the hill.

Pixel smartphones

Pixel phones are launching at a time when almost all of Google’s smartphone initiatives in the past haven’t done well. Pixel just seems like yet another Nexus, to be honest. The only difference is that unlike Nexus where the OEM which Google partnered got to keep its logo on the smartphone, this will not be the case with Pixel. Some would argue that in the case of Pixel, Google has more control but honestly it wasn’t like Google had any less control on the Nexus.

So the only way where Google can exert more control in case of Pixel is the hardware. If the leaked specs of Pixel smartphones are anything to go by, then Google is pretty much using the same type of specs as everyone else. Everyone uses a Qualcomm processor. Everyone puts in 3GB-6GB of RAM in the device, the generic 32GB/64GB/128GB device storage option. In case of design, the Pixel smartphones have horribly big bezels and if that’s where Google has exerted “more control” then it has exerted that in a negative way considering that manufacturers like Samsung and LG have mastered the art of fitting larger displays in smaller form factors by having razor thin bezels, curved displays etc.

I have already detailed in a previous article of mine as to why it no longer makes sense to enter the smartphone market. In my opinion, no one should enter the smartphone market unless they have the required scale or have something totally unique. Pixel is a totally new smartphone brand and from the looks of it, is a “me-too” smartphone with the exception of updates delivered directly from Google, which honestly apart from the tech enthusiasts no one else cares about.

Conclusion

I honestly feel that the Pixel smartphones are unnecessarily hyped to some extent. Sure, they’ll be a delight for the tech enthusiasts who can stand nothing else apart from stock android and want the latest of android delivered as soon as possible. But that is the exact same audience that even the Nexus catered to. The needs of the core tech enthusiasts or Android enthusiasts would be served by Pixel but its effect on the smartphone market as a whole would be negligible at best. Pixel is essentially just another Nexus with the exception that whoever is manufacturing Pixel smartphones doesn’t have their logo on it.

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