According to Morgan Stanley, Google Pixel – the high-end smartphone launched exactly two months ago today by Alphabet Inc. – will generate $3.8 billion in revenues for the company in 2017. Google Pixel retails at $650 and above, and to net close to $4 billion Google needs to move as many as 6 million units of the Google Pixel and Google Pixel XL.
Though that number might be dwarfed by Apple’s iPhone sales record of 212 million units sold in 2016, it’s still a huge validation of Google’s decision to keep trying its hand at the hardware side of mobile despite burning its fingers on Motorola.
In a recent article (linked below), we highlighted the roaring response Google Pixel received in India, and how the company quickly moved in to capture 10% of the premium smartphone market share in the country. It is still early days, however, as the novelty factor – along with aggressive marketing and heavy discounts – could have provided the initial boost for the smartphone.
The question is: can Google Pixel hold on to and actually increase that market share once the honeymoon period is over? And we’re not even talking about profitability. Outside of Apple and Samsung, no other smartphone manufacturer is able to register consistent positive net income; if recent reports are to be believed, Apple holds 91% of the smartphone industry’s profits.
The reason is simple: the iPhone is positioned at the top end of the smartphone segment, and Apple keeps a tight leash on the costs involved, thereby ensuring consistent profitability. While the cream of smartphone buyers is the best category to target if you want to be profitable, it’s easier said than done.
Google was able to do it and directly went for the top, and it looks like they might have a fighting chance in the market if Google Pixel delivers on sales numbers as enthusiastically as the way it is promoting the phone. The next six months of sales figures should tell us if Morgan Stanley’s estimate is accurate, but until then let’s just keep counting the Pixels as the units are sold around the world.
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