Google’s release of the Pixel and Pixel XL smartphones has been welcomed by the critics and it won’t be long before we know the consumers’ reaction. But there’s one other group that should be looking at the Pixel devices with trepidation. Android’s other manufacturers.
Google’s Pixel and Pixel XL are priced to go head-to-head with Apple’s iPhone 7 and iPhone 7 Plus. By equalizing the price, Google is making a clear statement to main street America, “these phones are the same.” While the obvious joke is “of course they are, just look at the design echoes”, Google is positioning the Pixel smartphones at the high-end.
But this strategy runs a notable risk. It puts the Pixel head-to-head with the high-end smartphones from the other Android manufacturers. If the Pixel succeeds in the marketplace, it might take market share from Apple’s smartphones, but it’s more likely to cannibalize the share of its partners
Members of the media examine Google’s Pixel phone (Photo by Ramin Talaie/Getty Images)
With the commoditization in the supply chain and the advances made in software and hardware, even an entry-level smartphone will have more than enough power to run Android comfortably with a mix of apps for social networking, communication, web browsing, corporate work, and a few games for relaxing. The lower end of the Android market is competitive, powerful, and offers the regular users a range of comfortable and competent smartphones to choose from.
The high-end is where manufacturers show off design skills, new technologies, and attempt to advance what is expected from a smartphone. In general the specifications are going to be as high as possible and these phones are generally above nickel and diming customers. When you go for a high-end phone, you are making a statement, delivering more power, and posturing that you are better than any other manufacturer.
These two extremes mean the mid-range device is stranded. A few years ago the mid-range allowed budget-focused consumers to move up from a basic smartphone design by deciding on a model that had more storage, a better camera, or improved battery life. It was possible to pick up a smartphone that was focused on a specific area of competence. Thanks to Moore’s law, the low-end handsets now offer all of these advantages. And if you want to turn on the power, then the high-end devices push everything to the max and offer the excellence experience.
The mid-range market is small, is shrinking, and any smart manufacturer is going to focus a handset on the higher or lower end of the scale. There is no sitting on the fence. Google, like many manufacturers before it, had to decide to push its smartphone high or low. The Nexus devices were always low, but with enough marketing of them a s ‘pure’ devices or suitable for developers they found a strong level of recognition with the geekerati, but never broke out to challenge anyone. That’s not the case with the Pixel and Pixel XL. The Google designed (and HTC manufactured) smartphones have pushed to the top of the specification charts, are gunning for the high-end market, and are hungry for the comparison to the new iPhones.
Rick Osterloh, SVP Hardware at Google Inc., speaks during an event to introduce the Google Pixel phone (Photo by Ramin Talaie/Getty Images)
I wonder what Samsung and the other Android manufacturers who rely on the high-end space to promote their brands think of Google muscling in?
Google has little choice. The move away from the developer-focused Nexus devices to the more consumer friendly Pixel devices forces the high-end approach – especially as the Daydream View system needs a high-end handset. Unfortunately the profits in the high-end market are pretty much owned by Apple. There’s no way for Google to ensure that Pixel sales are only to disgruntled iOS owners, so part of the Pixel’s success is going to come from taking away the share and profit left over by Apple. Google will be taking from its own Android partners.
The reaction to the Pixel from Android’s manufacturers could have a huge impact not on the success of Pixel, but on Android. Taking away some of the profits from the high-end manufacturers for itself feels like a low blow, but what are the manufacturers going to do? They don’t have any viable options to replace Android with. iOS is naturally only for Apple, Windows 10 on mobile is an incredibly risky choice for a mainstream device and other Linux-based options are not mature enough.
It feels like Google is gambling that the manufacturers need Android more than it will be upset with them over the release of the Pixel. That may well be true in the short-term, but Android as a whole is worth far more to Google than Pixel is worth. If Pixel is too much of a success, it could seriously weaken the rest of the Android platform.
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