Google doesn’t sound like it’s had a great time trying to sell consumers on its Pixel line of phones lately, in part because there’s too much competition for high-end devices—at least according to remarks made during an earnings call with Ruth Porat, chief financial officer of Google’s parent company Alphabet.
Per the Verge, Porat said that Pixel sales were lower in Q1 2019 compared to the year before, specifically citing “some of the recent pressures in the premium smartphone market.” As 9to5Google noted, Google “does not break out hardware results in earnings,” but combines them into an “Other revenues” section that includes the Play Store and Cloud—this number did climb upwards to $5.4 billion from $4.3 billion the prior year.
According to 9to5Google, Porat and Google CEO Sundar Pichai were upbeat about the Google Home line of products, with the Home Hub and Home Mini touted as best sellers. But in general, it seems like the last quarter was rough for Google’s smartphone business—probably because the Pixel 3 and Pixel 3 XL debuted in late 2018 at starting prices of $800 and $900 respectively in a market that is already crowded by expensive options from Samsung and Apple. Per the Verge, one analyst noted that hardware does not appear to be doing much to impact Google’s overall revenue and asked if Pixel was heading the same dreaded direction as Microsoft’s defunct Windows Phones.
That’s a shame, because the Pixel 3 and its larger cousin are really good phones with standout software and photography abilities. But there are other more encouraging signs: A recent report by Counterpoint Research found that Google broke into the #3 premium smartphone OEM in the U.S. in Q4 2018, beating out LG, indicating the Pixel line was making some headway even if the overall premium segment has suffered. What’s more, the Pixels are getting cheaper: Google is currently selling off units at $200 off until May 6, and there have been various other deals at times via Verizon.
Of course, there’s also the upcoming Pixel 3a and 3a XL, mid-range, lower-priced versions of the Pixel 3 line that are expected to be announced at Google’s I/O 2019 keynote on May 7. Those phones are planned to be downgrades from their predecessors except in camera power, one of the Pixel 3's biggest selling points—perhaps an opportunity for Google to succeed outside the flailing premium market.