Google’s Pixel to challenge Apple’s iPhone, other premium Android handsets

Oct 18, 2016 07:26 PM IST

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High prices of smartphones may limit uptake of Daydream VR headset with controller, analysts claim.

At a time when the world is reeling under headlines of Samsung’s Galaxy Note 7 battery explosions and Apple iPhone 7’s hissing sounds, Google seems to have hit bullseye with the timely launch of its Google Pixel smartphones -- Pixel and Pixel XL.

Rick Osterloh, SVP Hardware at Google, introduces the Pixel Phone by Google during the presentation of new Google hardware in San Francisco, California, US.(Reuters)

Analysts believe that Google’s smartphones will be the safe choice for consumers who seek a return on investment as they want a premium smartphone with a good overall experience.

“As far as competition is concerned we believe it gives choice to users in super premium segment 98% of which was earlier controlled by Apple and Samsung. I do think Pixel will be a strong competitor for Apple’s iPhones, but is likely to be an even more formidable competitor for Samsung’s premium handsets,” Tarun Pathak, senior analyst at Counterpoint Research, said adding that the premium smartphone segment represents 7-8% by volume and 17-20% by value in India.

He also said that the Diwali season will also boost sales of Pixel handsets.

However, there are other indications that Google is upping the competition ante with Apple and Samsung. “With the Pixel smartphones, Google is finally completing its creeping ‘proprietisation’ of Android. Now, Google has dropped use of its hardware partner brand and offers smartphone models with unique innovations not yet available to partners,” Ian Fogg, senior director, mobile and telecoms, IHS Markit, told HT adding that Pixel smartphones “represent the culmination of Google’s ongoing moves to take ownership of Android.”

“Google has a hardware group now. Although the hardware integration and manufacturing is being done by HTC, it is now in more of a contract manufacturing role Similar to how Foxconn manufactures for Apple,” Pathak explained.

Brian Rakowski, VP of Product Management at Google, speaks about the Pixel phone, during the presentation of new Google hardware in San Francisco, California, US. (REUTERS)

Analysts also belive that Google has chosen 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). Smartphones 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,” Fogg explained.

It is also interesting to note that Google has priced its phones in the iPhone 7 range but is cheaper at least by Rs 3,000 which can be an incentive for consumers. But iPhone 7 is water-resistant and Pixel smartphones are not.

Consumers, who are looking for a good camera experience will also have a choice now with the Pixel offering better optical image stabilisation and HDR+ modes.

Sabrina Ellis, Director of Product Management at Google, speaks about the new Pixel phone during the presentation of new Google hardware in San Francisco, California, US. (Reuters)

However, analysts are predicting that the high pricing of Pixel smartphones will limit sales and hurt Daydream VR headsets uptake. “Google lacks the brand awareness and capabilities as a hardware maker of Apple, or Samsung and hence its uptake might suffer,” Fogg said adding that the high price points will hurt initial adoption for Google’s fledgling Daydream VR platform.

“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,” Fogg explained adding that Google must build an organization to drive smartphone adoption across channels, incentivise 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.

But experts believe that Google is relying on its Assistant to drive sales which the company is pitching against Apple’s Siri. The company showcased several use cases for the digital concierge.

“By capturing usage information about Google hardware owners, the company wants to deliver smarter experiences based on a user’s interests, locations and activities and adds to the vast pull of data across many users to be the training data for large scale deep learning,” Fogg said adding that it would help the company deliver more focused, more valuable advertising.

The Pixel phones, protected by Corning Gorilla Glass 4, will come with Qualcomm Snapdragon 821 processor along with a 4GB DDR4 RAM unit. In terms of camera, the phones will sport a 12.3-megapixel rear camera. Other specifications include a 2,770 mAh and 3,450 mAh battery options, latest Bluetooth module, USB Type C and 3.5 mm headphone jack.