On iPhone day, Google’s big Pixel phone problem looms large

Today, Apple will announce some new iPhones. Before the year is through, it will sell tens of millions of these phones worldwide, with each sale averaging a price any other smartphone maker could only dream of. Around a month from now, Google will offer its retort, in the form of the Pixel 4. The Pixel 4 will not be the source of any grand claims about sales figures, because Google will probably be lucky to even crack a million units before 2019 ends, if the Pixel 3’s struggles are any sort of evidence.

After three years and soon four generations of Pixel smartphones, Google has failed to generate meaningful marketplace traction for its in-house smartphone brand. It has even reneged on its own promise to keep the Pixel brand “premium” by launching two mid-range smartphones, the Pixel 3a and 3a XL, earlier this year. Both offer comparable performance to Google’s much more expensive Pixel 3 and 3 XL in the Pixel’s core performance metric: photography. This has rightly raised concerns that the Pixel team’s desperation to expand its market footprint is now threatening to cannibalize what high-end sales it does generate, as well as undercut the launch of the next generation of its phones.

The Pixel 4 promises to bring even more powerful photographic prowess to Google’s phones, offering two rear-facing cameras (a first for a Google smartphone) and likely a form of hybrid zoom that will allow the Pixel to shoot photos at an effective 8x magnification. This is in addition to a slew of rumored camera features that will almost certainly be launch-exclusive to the Pixel 4, with some eventually trickling down to the Pixel 3 and 3 XL via software updates (and, next year, probably to the Pixel 4a). The other notable feather in the Pixel 4’s cap will be the next generation version of the company’s digital assistant, which Google has hyped as a truly huge leap in both experience and performance over its current incarnation. It will also be the first Android phone to use an OS-native secure face unlock (previous iterations haven’t worked with things like Google Pay or biometric auth in 3rd party apps), as well as integrate Google’s Soli radar-powered gesture controls. All of these features play to what it is increasingly clear is Google’s greatest strength over its competitors: AI and machine learning. What is less is how much consumers care about these features, or how unique they are in the grand scheme of things.

Huawei’s P30 Pro takes truly excellent zoom photos with its triple camera array. Many phones today feature simple camera face unlock that will likely be far faster (if much less secure) than Google’s IR projector dot technology, which is similar to that used on the iPhone. Given these phones have fingerprint scanners as well — it seems the Pixel 4 does not — they also offer a more flexible biometric authentication model. As to Google’s next-gen Assistant, the same experience will probably be available on Android phones from Samsung and others some time next year, after Google gives the Pixel its now-customary exclusivity window. And we can probably forget about Google competing on price, especially now that it has the cheaper Pixel 3a to point to as a budget-friendly alternative.

With consumers replacing their smartphones less and less frequently, the battle for their attention has become ever more cutthroat. Samsung launched the $1100 Galaxy Note10+ last month with exceptionally aggressive trade-in offers, with up to $600 in immediate discounts on offer if you traded in a Pixel 3, Galaxy S10 or Note9, or any model of iPhone X. While Samsung’s handsets are notoriously bad at holding their resale value (due in large part to these promotions), they’re still great smartphones. Someone coming from a Pixel 3 would have been able to upgrade to a Galaxy Note10 for just $400 this year, and it’s exceptionally unlikely Google will offer such steep discounts to lure customers to the Pixel 4. Last year, the Google Store valued the Pixel 2 XL at a pathetic $325 as part of its trade-in promotion for the Pixel 3. That price matched what Apple was willing to pay on trade-in when switching to the iPhone, but Google must do better here if it’s going to get the attention of consumers on a value basis.

Google does have tools at its disposal. Alphabet is currently sitting on the largest cash reserves of any company on the planet — cash that could be used to subsidize growth of the Pixel smartphone unit by undertaking more aggressive marketing, promotions, and pre-order discount offers. But if Google’s behavior in the past has been any indicator, it has been reluctant to provide any discount on its Pixel phones until after they’ve launched, instead letting carrier partners like Verizon take the lead on special sales. Last year, Google infamously chopped $200 off the just-launched Pixel 3 XL on Black Friday, angering customers who had mere weeks earlier paid the full $900 MSRP. Such strategies show a company still struggling to understand the wild west of consumer electronics retail, and paint the Pixel’s sales team in a particularly poor light. The 3 XL Black Friday debacle in particular seems one of borderline incompetence.

While I consider myself a fan of Google’s Pixel phones for their unfettered software and consistently stellar still image performance, I have no illusions about the Pixel as a business unit: it is doing very badly. Without radical changes to the company’s sales and promotional strategy, international expansion, and a more aggressive willingness to keep core features out of the hands of competitors like Samsung, I’m unsure how Google can ever hope to be a meaningful player in the larger smartphone market. We all take our annual jabs at Apple’s many “innovations” with each iPhone launch, but let’s remember: Apple earned its way to the top. Four generations in (eleven, if you count Nexuses), Google still seems to be struggling to get off the ground floor.

All Rights Reserved for David Ruddock

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