Editorial: With sales falling backward, Google's Pixel 3a takes a desperate step into chea...

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in iPhone
When Google decided to stop rebranding its partners' Androids as Nexus models and launched its own Pixel phones three years ago, it targeted the camera as its best hope for standing out in a crowded, competitive smartphone market. That strategy failed in 2016, 2017, and in 2018. This year, Pixel 3 sales actually fell. Now, Google is back with a Nexus-priced phone in a market being devastated by even cheaper commodity.

Pixel 3a
Google Pixel 3a XL

Charting out the failure of Pixel

Google has avoided reporting unit sales or revenues of its Pixel phones. After many years of Nexus-rebranded phones failing to find many buyers, nobody expected Google to tear out of the gate with tens of millions of sales to rival Samsung's Galaxy S series, or hundreds of millions of sales to rival Apple's iPhone.

However, the notorious tech journal DigiTimes was quick to speculate that Google's Pixel smartphone might "reach 3-4M shipments in the second half of 2016," a figure that could establish Google as a fledgling new entrant.

As it turned out, Google didn't even reach sales of two million Pixel phones in 2016. Citing data from IDC, Cheng Ting-Fang and Lauly Li reported for Nikkei that "Google has only a small presence in the global smartphone market. Pixel shipments in 2018 were around 4.68 million units, or around 0.33% of the total market, research company IDC data showed. This compared with 3.45 million units, or 0.2% of the market in 2017."

We've previously offered criticism of data from IDC and reporting by Nikkei. There's problems here, too.

In fact, while IDC analyst Francisco Jeronimo a year ago echoed the same sentiment that Google Pixel shipments "represent a tiny portion of the smartphone market" in a public Tweet, he provided materially different "embarrassing" numbers for his company. At the time he stated that 2017 Pixel shipments had "doubled" to 3.9 million in an annual market of 1.5 billion smartphones.

#GooglePixel shipments continue to grow, but they still represent a tiny portion of the smartphone market pic.twitter.com/W6FVZlYOlC

-- Francisco Jeronimo (@fjeronimo)
IDC numbers are at odds with IDC numbers, and definitions of words like "growth"


That's a 13% difference between what IDC tweeted and what it reported. Further, 0.2% of 1.5 billion is 3 million. So there are a lot of puzzle pieces here that don't fit together. Jeronimo also spun Pixel shipments as 'continued growth,' stating in the tweet stream that in its launch year, the original Pixel has only shipped 1.95 million units--half of what DigiTimes had suggested they might.

Assuming IDC numbers are based on real data, that means Google shipped 1.95 million of the original Pixel and Pixel XL models in the final three months of 2016, after launching in October. It then reached 3.45 million units of both Pixel and Pixel 2 models over the next year. But that's not "continued growth." It's a pretty spectacular drop from 65,000 units per month in 2016 to just 28,750 units per month in 2017. Jeronimo characterized this as "doubling" shipments in his February 2018 tweet. One could be forgiven for misstating such a thing if they weren't the source of the data.

Across 2018, sales of Pixels, which began to include the new 3 series, did grow over the previous year, but they certainly didn't double. Based on IDC's reports, they grew by 1.23 million, reaching average monthly sales last year of 39,000. Or if you go by the previous number IDC cited to suggest Pixel was "doubling," you get an increase of just 780,000 additional Pixel sales last year. Still solidly in "massive flop land" no matter what estimates you look at.

Google's comments to analysts are as terrible as IDC's estimates

In Google's quarterly earnings calls, the company's executives have been repeatedly asked, albeit meekly, about the status of its Pixel efforts. A year ago in Q1 2018, UBS analyst Eric Sheridan asked for an update, noting, "you've now been through two years of sort of Pixel devices. You've made the acquihire of the HTC engineers. Can you give us a sense of what you've learned so far from your Hardware efforts and how that might evolve product innovation or go-to-market strategies long-term?

Google's chief executive Sundar Pichai replied with a rambling nothing-burger.
"On Hardware, you know, the exciting part for us is, you know, now, I think we have all the end-to-end capabilities of a world-class, you know, hardware organization along with the quality of the software organizations we've always had. And in this area, it truly takes long-term planning," Pichai said "And so, for example, if you think about silicon, et cetera, the longer you can do it, the more advantages you have.

And so, you know, I definitely feel we are taking the steps towards being able to do this well for the long-term. Part of that, obviously, involves scaling up our go-to-market strategies, both in the US and internationally, so that we can drive--drive adoption.

You know, I said earlier, our Net Promoter Scores show that we are right up there with the best in class devices, and across all the products we have. Not just our Pixel, across our Nest family and everything we do. So the opportunity is clearly there. We're going to lean into it. And, you know, it takes 2 to 3 years to really get to the scale where we want to see it, but we're committed to getting there."
Sundar Pichai
Google CEO Sundar Pichai


Effectively, it sounds as if Pichai was saying that the problem was "scaling up" marketing and leveraging Pixel's huge investments made in silicon, to reach the "you know" scale needed in 2-3 years. That was the only mention of Pixel in the Q1 call.

However, in this year's Q1, at Google's third year of Pixel sales, the company's chief financial officer Ruth Porat volunteered some new data on Pixel. She stated, "Other revenues for Google were $5.4 billion, up 25% year-over-year, fueled by Cloud and Play and partially offset by Hardware. [] Hardware results reflect lower year-on-year sales of Pixel, reflecting in part heavy promotional activity industry-wide given some of the recent pressures in the premium smartphone market."

So rather than just scaling up slowly, Pixel unit sales are now shrinking and offsetting the growth seen in Other revenues. Pichai subsequently offered some additional comments, stating that "the breadth and depth of our product lines across Pixel, Nest and Home is amazing," and adding that "we're still early in the hardware journey, and when I look ahead at the portfolio that we've created across Pixel, Home and Nest, I feel really good about the range of products that we have."

Google's spectacular failure in its Pixel "journey"

Note that Pichai said that after Google canceled its Chromebook Pixel notebooks and discontinued the Pixel C Android tablet last month, both of which were once described as strategic and important products to feel good about.

Pixel C
Sundar Pichai feels good about Pixel, but he also felt good about Pixel C


After Google spent $1.1 billion to acquire most of HTC's phone engineers, and dumped incredible hundreds of millions into custom silicon design, its results are limited to "feel good" awards for actual products that are not selling well at all.

Google didn't say its Pixel sales were seasonally down from the holiday quarter. They were down over the year-ago quarter, meaning Pixel 3 sales collapsed after a launch blip even worse than Pixel 2's had. There's no way to spin that as anything other than a total, embarrassing failure.

After three years of sales, Apple Watch ramped up as a hit in a totally new product category. iPad did the same in tablets. Google has failed in both its Android Wear OS and in tablets, but here it is demonstrating that even in smartphones, after three years of "ramping" it's still not making any forward progress. It's sliding backward.

That's despite massive global advertising by Google that has sought to leverage even its own search page, and constant flogging by Bloomberg and the Verge--which seeks to weave native ads for Pixel phones into virtually every article it prints.

Google is not some neophyte to the smartphone game. It's been trying to sell Nexus phones in partnership with Android licensees since 2010. It hasn't been a humble decade. Google rather arrogantly threw out a series of Nexus flops, then outlined Pixel as its plan to beat Apple in the premium space. Pichai's most recent stab at Apple, in his public statement "Privacy Should Not Be a Luxury Good", rings hollow when you note that Pixel phones have been priced as high or higher than the year-ago iPhones they are aiming to compete against.

Google's unfocused camera angle for Pixel

Google has shamelessly copied Apple's designs while portraying its single-camera Portrait mode as being better. In some cases, the Pixel camera is better. It can create a Portrait effect without needing to be a specific distance away, and it can uniquely synthesize low light images in near darkness. But critics hailing the Pixel's camera features have neglected to mention that Apple's dual cameras since iPhone 7 Plus actually capture real depth data that can be used for effects other than Portrait mode, including those created by third-party developers.

Portrait Lighting
Taking pics in the dark is nice, but most people want flattering selfies


Additionally, the separate 2x zoom camera is useful for a variety of other things from capturing closer, less distorted panoramas to zooming in on wildlife in a slow-motion shot. Pixel is also lacking features like long exposure, adjustable aperture settings for Portrait shots, and has a lower quality display.

And despite having a huge, ugly notch, Pixel 3 still lacks anything like Apple's TrueDepth imaging system that supports Face ID, Portrait Lighting selfies, Animojis and other front-facing AR effects from a variety of third-party apps.

Apple's iPhone is also recognized for capturing exceptional video, something Pixel falls short in. And Pixel has consistently lagged behind other Androids in both real world and benchmarking performance due to its limited RAM.

With its cheaper new Pixel 3a, Google is digging back even further to achieve the performance of a 2013 iPhone 6. It is also carrying 4GB of RAM, the least of any Android flagship. On Android, that's not nearly enough because the OS is far worse at managing memory, and apps and games routinely demand four times as much RAM as comparable titles on IOS, according to GameBench.

Will a cheaper looking, slower Android with some unique camera abilities, but missing many unique iPhone camera features and can't match Apple's privacy and security, can't run ad-free iOS games, and can't keep up with blue bubble chats turn around Pixel's sorry trajectory? Judging from Samsung's troubled middle-ground offerings, it probably can't in a world where middling budget phones are already overserved by China.

Note that Google already tried slashing the price of Pixel 3 in half. A cheaper Pixel 3a model might cannibalize sales of other cheap midrange Androids, but is probably not enough to keep Pixel itself able to pay for very expensive silicon development as well as the salaries of two thousand members of HTC's former design team.
lkrupptmayRSGinSF
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Comments

  • Reply 1 of 72
    gatorguygatorguy Posts: 21,095member
    OMG! It's about time, Google is plainly doomed now.

    Desperation has set in, so much so that they're now deciding to offer smartphones at multiple price points with minor differences in capabilities and build and a mid-cycle release. What's wrong with just a couple of flagships, same time every year? Who does this, offering cheaper devices alongside "expensive", unless they're failing? Is anyone else's YOY flagship handset sales "falling backward"? Well there's the proof. 
    edited May 9 racerhomie3bigtdsavon b7chemenginrevenant
  • Reply 2 of 72
    steven n.steven n. Posts: 1,123member
    gatorguy said:
    OMG! It's about time, Google is plainly doomed now. Desperation has set in. 
    Google’s hardware efforts have been doomed since the disaster that was the Nexus One. They simply don’t understand hardware design. 
    racerhomie3correctionsmagman1979williamlondonlolliverpscooter63alexonlinelwiointrepidfosterwatto_cobra
  • Reply 3 of 72
    lkrupplkrupp Posts: 7,300member
    gatorguy said:
    OMG! It's about time, Google is plainly doomed now. Desperation has set in. 
    Would we have expected anything less from the resident Google apologist?
    steven n.tmayStrangeDaysmagman1979williamlondonlolliverpscooter63alexonlinewatto_cobra
  • Reply 4 of 72
    lkrupplkrupp Posts: 7,300member
    The Pixel 3a is an abject failure and blaming it on Verizon exclusivity doesn’t change anything. It’s right up there with the Samsung Fold.
    racerhomie3correctionslostkiwimagman1979williamlondonlolliverlwiowatto_cobra
  • Reply 5 of 72
    red oakred oak Posts: 678member
    How does one become CEO of Google, you know, when you speak, you know, like that?  You know?
    StrangeDaysmagman1979kiltedgreenmacpluspluslolliverneutrino23alexonlinewatto_cobra
  • Reply 6 of 72
    gatorguygatorguy Posts: 21,095member
    steven n. said:
    gatorguy said:
    OMG! It's about time, Google is plainly doomed now. Desperation has set in. 
    Google’s hardware efforts have been doomed since the disaster that was the Nexus One. They simply don’t understand hardware design. 
    We are in complete agreement on that point. I don't think they do either. Probably why they've begun assembling a unified and experienced product design team for their hardware line. Up to now their teams have not been operating in sync and all over the place with design. There's always that chance they've figured out it's not ever going to work the way they've been attacking it. Engineering is fine, software is fine. Neither of those can reach their full product potential without an attractive outfit to put it in and a little beauty makeup on the face IMO.  

    Except for those times they've somewhat mimicked Apple (the Pixelbook and OG Pixel) their hardware has not looked visually impressive, with the possible exception of the original Google Home speaker which I think was one of their better efforts.
    edited May 9 revenant
  • Reply 7 of 72
    tyler82tyler82 Posts: 881member
    An advertising company makes a smartphone. Adorable
    racerhomie3lkruppStrangeDayslostkiwimagman1979williamlondonlolliverpscooter63lordjohnwhorfinalexonline
  • Reply 8 of 72
    racerhomie3racerhomie3 Posts: 1,153member
    I totally agree. Google is a monopoly on the web , and I wish to give it no more power than it already has.
    edited May 9 correctionsmagman1979williamlondonlolliverwatto_cobra
  • Reply 9 of 72
    melodyof1974melodyof1974 Posts: 102member
    There is going to be a big hole in the ground for the Pixel phone, Zune, and ET Atari cartridges.
    correctionslostkiwimagman1979lolliveralexonlinelwioraoulduke42watto_cobra
  • Reply 10 of 72
    rogifan_newrogifan_new Posts: 4,189member
    Just going off the headline I knew this was a DED article. Here’s a phone that might be somewhat successful because of value for price (and it will be available on more carriers) so gotta trash it out of the gate. I guess Apple’s products can’t stand on their own? Sad.
    chemenginwilliamlondonrevenant
  • Reply 11 of 72
    rogifan_newrogifan_new Posts: 4,189member
    gatorguy said:
    OMG! It's about time, Google is plainly doomed now.

    Desperation has set in, so much so that they're now deciding to offer smartphones at multiple price points with minor differences in capabilities and a mid-cycle release. What's wrong with just a couple of flagships, same time every year? Who does this, offering cheaper devices alongside "expensive", unless they're failing?
    DED is obviously worried this device could cut into iPhone sales. It’s getting decent reviews (a good phone at a very good price) and will be on more carriers. There would be no reason to give it attention otherwise.
    bigtdschemenginmacpluspluswilliamlondonrevenant
  • Reply 12 of 72
    fotoformatfotoformat Posts: 288member
    Back in the early '70s when working as a production designer for a major TV company in the UK a team of 'management trainee consultants' questioned various senior staff members on a variety of subjects. I remember a colleague being abruptly stopped in mid-flow having only spoken to about the same length as Pichai's quote above - and with the same number of "you know" nonsense words inserted - with a brusque... "No, we don't fucking know, that's why we're asking you!" I don't think any of us overhearing the exchange have unthinkingly used the words "you know" ever again in explanatory conversation!
    gatorguykiltedgreenmacplusplusRSGinSFlolliverlwiowatto_cobra
  • Reply 13 of 72
    majorslmajorsl Posts: 119unconfirmed, member
    gatorguy said:
    OMG! It's about time, Google is plainly doomed now.

    Desperation has set in, so much so that they're now deciding to offer smartphones at multiple price points with minor differences in capabilities and a mid-cycle release. What's wrong with just a couple of flagships, same time every year? Who does this, offering cheaper devices alongside "expensive", unless they're failing?
    DED is obviously worried this device could cut into iPhone sales. It’s getting decent reviews (a good phone at a very good price) and will be on more carriers. There would be no reason to give it attention otherwise.
    It's very decent for my teenagers who want the camera quality of a higher end phone, but dad doesn't want the expense. Mine would be very, very happy with this phone, and pending the review it'll be my choice on their upgrade plan.
    bigtdscorrectionschemenginwilliamlondon
  • Reply 14 of 72
    doctwelvedoctwelve Posts: 46member
    Surprised their failed modular phone wasn't mentioned. Tech sites are lubing themselves up for Google. No surprise. This morning cnet's headline was "Google Pixel is now as easy to find as the iPhone." WTF is that supposed to mean? It makes as much sense as, "Limes are another citrus fruit like oranges." 
    correctionsStrangeDaystmaylostkiwimagman1979kiltedgreenRSGinSFlolliverrevenantlwio
  • Reply 15 of 72
    bigtdsbigtds Posts: 132member
    Oh look! Another "Apple good, everyone else bad" editorial.  Ridiculous. No objectivity whatsoever.
    chemenginwilliamlondon
  • Reply 16 of 72
    gatorguygatorguy Posts: 21,095member
    doctwelve said:
    Surprised their failed modular phone wasn't mentioned. Tech sites are lubing themselves up for Google. No surprise. This morning cnet's headline was "Google Pixel is now as easy to find as the iPhone." WTF is that supposed to mean? It makes as much sense as, "Limes are another citrus fruit like oranges." 
    What they probably refer to is the Pixel is no longer exclusive to Verizon, which was essentially tying their horse to a single cart and hoping the horse was dependable. Now you'll find these Pixel 3a mid-range phones (and probably the flagships later this year) at a number of carriers and retailers which by itself should greatly increase sales even disregarding the mid-tier prices.
    revenant
  • Reply 17 of 72
    bigtds said:
    Oh look! Another "Apple good, everyone else bad" editorial.  Ridiculous. No objectivity whatsoever.
    Looking at your 21 post you've done previously may be you should visit androidinsider instead of this forum?
    StrangeDayslkrupplostkiwimagman1979williamlondonlolliverwatto_cobra
  • Reply 18 of 72
    gatorguygatorguy Posts: 21,095member
    bigtds said:
    Oh look! Another "Apple good, everyone else bad" editorial.  Ridiculous. No objectivity whatsoever.
    Looking at your 21 post you've done previously may be you should visit androidinsider instead of this forum?
    ... but Dad, all the good Android articles are here. 
    fotoformatchemengin
  • Reply 19 of 72
    correctionscorrections Posts: 1,386member
    Just going off the headline I knew this was a DED article. Here’s a phone that might be somewhat successful because of value for price (and it will be available on more carriers) so gotta trash it out of the gate. I guess Apple’s products can’t stand on their own? Sad.
    I guess it’s flattering that you think I control global opinions and can shift world markets, but I think you’re wrong. 

    I write what I think is accurate. When I’m right it’s because I’m looking at things correctly, honestly and realistically, not because I have god-like powers to convince the rest of the world to do what I outline so that what I say ends up to be right. 

    Surely if the nonstop, pandering Pixel propaganda from Gurman at Bloomberg, syndicated in print, in videos and on TV, as well as and the entire staff of The Verge and all of its networks of Vox podcasts hasn’t done one tittle of a dick to help Google sell any commercially relevant number of Pixel phones, my AI editorials also haven’t changed the world economy and struck down Google’s fortunes in hardware. 

    If you have a different opinion than me, you could articulate it and try to back it up with some sort of facts, rather than personally attack me, broadly implicate that I’m some sort of evil conspiracy against “value” and somehow singlehandedly propping up  “Apple’s products” that can’t stand up without DED 
    describing what’s going on in a way that forces 200M sales to transact every year in Apple’s favor. 

    Seriously, what a clown you’re being. And stop projecting with your desperate attempts to vilify and denigrate everything I write just because you’re terrified that I’m correct and that people might notice.  It’s way too late for that. 
    StrangeDays13485lostkiwimagman1979kiltedgreenmacplusplusRSGinSFlolliverpscooter63revenant
  • Reply 20 of 72
    correctionscorrections Posts: 1,386member
    DED is obviously worried this device could cut into iPhone sales. It’s getting decent reviews (a good phone at a very good price) and will be on more carriers. There would be no reason to give it attention otherwise.
    Yeah so it’s getting “decent reviews” as opposed to what previous Google vanity hardware project? 

    The important issues in the article are not that Pixel 3a threatens to sell or harm Apple, but that:

    IDC numbers are contradictory & problematic. 
    Google is totally, you know, bullshitting analysts. 
    Google has blown tons of money on hw w/o results. 
    Consumers are not heeding Pixel “reviews.”
    Pixel faces cheap Android commodity, not iPhones.

    Your reading comprehension is like seriously Pixel. 


    racerhomie3StrangeDayslostkiwimagman1979macpluspluswilliamlondonRSGinSFlolliverwatto_cobra
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