Shira Ovide, Bloomberg:
In 2017 and the first half of this year, Google shipped about 5 million Pixel smartphones worldwide, according to the research firm IDC. Apple Inc. sells as many iPhones in about eight days as Google did in 18 months — and even Apple has a relatively small minority market share in smartphones.
And:
Small numbers aren’t confined to Google, either. Journalists like me can’t stop talking about the “runaway success” of the Echo devices, Amazon.com Inc.’s rapidly expanding lineup of voice-activated home doodads. Amazon sold about 3.6 million of the two most popular Echo models from April to June, Strategy Analytics estimated. Fitbit, a company that journalists like me stopped talking about long ago, sold 2.7 million motion-tracking gadgets in the same period.
And:
For most software or internet tech empires, hardware is a niche hobby, and it will remain so for the foreseeable future.
It take a lot of R&D dollars, fragmentation of company focus, to design, test, build, and ship a hardware product. Why does Google do it? Interesting question.
OTOH, when someone focuses on pure volume, that tells me they’re not great at business analysis.
Margins and network effects and secondary markets matter for all of this stuff – Echo devices don’t need to be particularly profitable on their own, if they encourage people to buy more stuff from Amazon, for instance.
I think Google’s motivation for the Pixel is probably manifold – first, to have a platonic ideal Reference Android Phone; the Pixel is generally regarded as the best, purest, least awfully junked-up Android phone, as I understand it.
It also lets their engineers not rely on any particular third-party for hardware, or have to deal with their modified Android versions or overlays.
If it makes any net profit at all, that’s a bonus.
(Google ain’t a hardware company like Apple is, no – but I suspect keeping their hand in phone hardware helps keep the Android team grounded in reality as, effectively, a white label software house?)
Google needs hardware for the same reasons Microsoft does, but this question was answered long before the first Surface tablet appeared.
After years of an idiot CEO ridiculing Apple for building their own computers, Microsoft jettisoned the fool and replaced him with someone who knew that it’s the only way to control your software.
Because 11 years after Steve Jobs quoted the famous Alan Kay from 40 years ago “people who are really serious about software should make their own hardware,” Google and Microsoft have finally seen the wisdom in it.
Or they see the massive $$$ Apple earns on iPhone sales.
My bet is on the latter. What makes it even more sleazy is that Google is charging near iPhone XS prices, while still monetizing Pixel users’ data.