Google Pixel 3 is a disappointment in sales, sells less than Pixel 2

Alphabet, Google's parent company, received a call from its results yesterday. Although these calls mainly relate to advertising click-through rates and traffic acquisition costs, the call yesterday actually contained information about Google's smartphone sales. It turns out that sales of the flagship Google Pixel are down year by year, which means that the Pixel 3 is selling less well than the Pixel 2.

Here is the complete quote from Alphabet and Google CFO Ruth Porat:

The hardware results reflect the decline in pixel sales compared to last year, partly reflecting an intense promotional activity throughout the industry, due to some of the recent pressures on the market. premium smartphone market.

"The recent pressure on the premium smartphone market" can mean a lot, but Google basically admits that there is fierce competition for the Pixel 3 and that the phone is not selling as well as its predecessor. Google does not disclose "material results" in its earnings report. So we can only guess what is the difference from one year to the next. It was already serious enough to mention in an income call.

We were not big fans of the changes made to the Pixel 3. The smaller version cost $ 799- $ 150 more than the previous year's Pixel 2 – and the biggest Pixel 3 XL was costing $ 50 more than the Pixel 2 XL or $ 899. For this extra money, Google went from metal to glass, it had only 4 GB of RAM, the lowest of all Android products, and it even caused software gaffes such as locking users in its system. half-baked gesture navigation (which he's still trying to fix in this year's Android Q version). To top it off, the designs were pretty ugly, ranging from the old-fashioned Pixel 3 glasses to the incredibly wide screen of the Pixel 3 XL.

As for the competition of Pixel 3, Google has to deal with heavyweights such as Apple's iPhone XS and the Samsung Galaxy S10, two more hardware-oriented phones from companies, larger carrier offers and larger advertising budgets. In the amateur market, Samsung offers stricter specifications and OnePlus offers better value for money with a device like the OnePlus 6T.

Google's Pixel distribution network is just as terrible compared to the competition. Google sells the Pixel in only a handful of countries, while its competitors are present worldwide. The Pixel 3 is on sale in 12 countries and does not have any retail stores. In the United States, Google's only real operating partner is Verizon. Apple, by contrast, has an empire in the retail business, with iPhone sales in 70 countries, more than 500 Apple stores and iPhones in virtually every store. Samsung is launching an even wider network with the Galaxy S10, which is on sale in around 130 countries and, again, in almost every carrier store on Earth.

Investors were not happy to hear about the decline in Pixel sales. During the question-and-answer portion of the call, Bank of America's Justin Post even compared the company's hardware efforts with (hiccups) Microsoft!

When it comes to computer equipment, I think some people are concerned that its trajectory is not really solid. [There are] some comparisons with Microsoft 10 years ago. Really, help us understand the importance of this hardware business for Google and your long-term vision.

After highlighting the company's success with Google Home, Sundar said the smartphone industry was facing a "headwind". He went on to talk about general trends in the smartphone industry, such as foldable phones and 5G, but none of these features will be exclusive to Pixel.

What could help Pixel sales is a cheaper phone, which Google plans to announce on May 7. At the Google I / O 2019 conference, the company will announce the Pixel 3a, a mid-range version of the Pixel with a cheaper SoC and a plastic case. We do not know the price yet, so it's hard to tell if the phone will be a commercial success, but at least it's something. Google has also recently aggressively reduced the price of Pixel 3, with a half-price sale taking place earlier this month.

Ron Amadeo's recording image