Low Pixel sales are yet another indicator of Google's continuing struggle with hardware products

Looks like the Pixel isn’t the cash cow like the Samsung and Apple flagship smartphones that came in before it. After racing to the third spot  behind Samsung and Apple within a month of launch, the Pixel/Pixel XL has seen really slow sales according to a report in The Economic Times.

According to retailers and analysts, Pixel sales have been tepid at best . The major reason being given is the high starting price point of Rs 57,000 for the Google Pixel. Analysts also point to the greater brand recall of Apple and Samsung in this segment.

Stagnation after the initial jump in India and abroad

According to the shipment data shared last year, Google had managed to sell around 33,000 Pixel devices in the initial launch period around Diwali. Post that initial surge, shipments have been hovering around the 10,000 mark since, according to industry insiders. Apple and Samsung in comparison, have sold lakhs of units in the same Oct-Dec 2016 period.

It is not just the case in India, but is globally true of Pixel as well. According to Counterpoint Research, Google has sold around 2.5mn Pixel devices as compared to 70mn Apple iPhones and 80mn Samsung phones in the Oct-Dec period. This despite the fact that Samsung faced a heavy backlash after its Note 7 devices started exploding and were eventually taken off the market. Even retailers such as Bengaluru-based Sangeetha Mobiles have stated that Google Pixel sales saw hype initially, but sales haven’t been great since.

However, a Google representative told ET that Pixel sales have been going on as expected and there had been quite a positive response from consumers.

Google hardware never managing to take off

The poor sales of Google Pixel, reminds one of the failed Android One project that Google had embarked upon on India. Affordable Android handsets made by Indian smartphone makers were supposed to get the next billion users online. But thanks to poor sales and better offering by competition in a similar price range, put a spanner in the works of the Android One project.

Come to think of it, Google hasn’t really tasted massive success with any of its hardware products. Except maybe Chromecast. But if you look at the past, Google’s hardware hasn’t been breaking any records in terms of shipments. Nexus Q , the media streaming device, was shuttered soon after launch. Nexus Player was discontinued last year. Pixel C and Chromebook Pixel, have a very niche market and don’t even sell in India. Google Glass was another product which promised the moon, but never really saw a commercial release. Google Wi-Fi, Google Home and Daydream VR headsets are yet to make it to India and it is premature to talk about their sales as they have been launched just recently.

The Nexus smartphones, which were made by third parties, however were an exception. But then, there was an existing supply chain and offline and online channel support to sell these smartphones. With the Pixel, Google has to take care of all these aspects on its own. Considering it is a brand new smartphone player and has still to earn its stripes in the branding department — in the smartphone segment — it is really no wonder that sales haven’t been the best.

According to one analyst quoted in the ET report, Pixel seems more like a brand building exercise and there was no expectation of high volume sales. If that is the case, Google suddenly coming out with a new online partner, Snapdeal, and offering cashback offers with the purchase of the Pixel, seem to point otherwise.

Analysts are also expecting a price correction in the first half of the year to drive up sales. Considering Samsung is not releasing its Galaxy flagship next month, it gives Google more time to cash in on the leeway. But still, I wouldn’t bet on tens of millions of sales of the Pixel line.

Barring pure Android and baked-in Assistant, nothing extraordinary to justify price

Back in November 2016, when we had reviewed the Google Pixel XL , we had observed that it was a great device — probably the best Android device out there — but there was no justification for the high asking price. To elaborate on that point:

Barring the fact that the Pixel XL comes with stock Android 7.1 Nougat OS which is expected to get timely Android updates before anyone else, there is really no reason that makes the Pixel XL stand apart, to justify that price tag. Assistant may be baked into the Pixel XL, but is still available on other Android phones inside the Allo app. Daydream VR platform is yet to go live, and moreover with time and with more devices getting VR ready, that USP is also gone. And honestly speaking, the Daydream VR experience is not really top priority for a lot of consumers.

In the Android ecosystem, the Samsung Galaxy S7 Edge priced at Rs 51,000 still offers a lot more of a value proposition. Plus, you get the option to expand storage. Pixel XL’s unlimited storage for photos and videos is great, but that storage facility is not applicable for documents. If you are a photography enthusiast, yes the Pixel XL offers a great camera. But so does the S7 Edge.

On the Apple side of things, the iPhone 7 Plus 32GB is priced at Rs 72,000. The price is Rs 5,000 more, but keep in mind that Apple has a robust after-sales service ecosystem in India. Google Pixel XL is offering support from within the device and its offline services are handled by HTC. A quick search on their respective after sales service pages, you will notice that Apple offers far more centres than HTC. When you are spending around Rs 70,000 on a phone, you want to make sure that an after sales centre is easily accessible. It is a well known fact that Apple iPhones have a much higher resale value than any Android device priced in the same bracket. Moreover, if you work on macOS and have an iPad, the choice is a no-brainer, and it just makes sense to spend Rs 5,000 more and go for the iPhone 7 Plus.

Google Pixel XL offers an excellent camera, great raw performance, good battery life. There’s nothing to not like about the device. The only downer is its price point.

Whether Google wants to use Pixel to show off its mobility and AI prowess or it wants to focus on creating an ecosystem of devices, which communicate with each other, one thing is clear — Google has a lot to learn on how to effectively sell volumes of the hardware it makes.