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Google seeks largest-ever order for Pixel 7 launch

 1 year ago
source link: https://asia.nikkei.com/Business/Technology/Google-seeks-largest-ever-order-for-Pixel-7-launch
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Technology

Google seeks largest-ever order for Pixel 7 launch

U.S. search engine giant lures users with upgraded Tensor chip and lower price point

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The Google Pixel 7 Pro (Screenshot from Google's YouTube video)

YIFAN YU and CHENG TING-FANG, Nikkei staff writersOctober 6, 2022 15:51 JSTUpdated on October 7, 2022 00:39 JSTNorth America

PALO ALTO, U.S./TAIPEI -- Google is preparing its largest-ever launch order for its latest mobile phone range as it takes on Apple, Samsung and other Asian rivals in a shrinking global market.

Google has requested more than 8 million units for its Pixel 7 range, sources familiar with the matter told Nikkei Asia. It has told several suppliers it roughly aims to double its smartphone sales for 2023 compared with this year, two people with direct knowledge said.

The U.S. search engine giant officially launched the next-generation Pixel -- the Pixel 7 and Pixel 7 Pro -- at a Thursday event in Brooklyn, New York. Both the Pixel 7 and Pixel 7 Pro are equipped with an upgraded Tensor G2 chip, which gives the Android device better security and improved camera functions such as auto-deblurring photos.

The Pixel 7 and Pro models start at $599 and $799, respectively, lower than the starting price of the latest Samsung flagship Galaxy phones or iPhone 14s.

Google is also preparing for launch orders of about 4 million units for a budget Pixel handset that is set to launch early next year, sources with knowledge of the plan said.

Google's upbeat plans make it one of the few handset makers to continue to grow amid a significant economic slowdown. The global smartphone market shrank 11% and 9% year-on-year in the first and second quarters of 2022, according to research company Canalys.

Google has become more serious about its hardware business since last year, when it introduced its own application processor, Tensor, to its Pixel 6 lineup. The Pixel 6 became the "fastest-selling" Pixel range ever, Google and Alphabet CEO Sundar Pichai said during an earnings briefing in April.

After the introduction of the Pixel 6 range, Google's shipments in the second half of 2021 and first half of 2022 increased nearly 130% to some 6.2 million units, compared with only 2.7 million in the same period a year earlier, according to research company Canalys.

Google has been telling suppliers since 2021 that its position as the only U.S. maker of Android smartphones will help it boost business at home and in Europe and Japan, people briefed on the matter said.

Google did not respond to a request for comment.

Canalys data showed Pixel managed to grow 345% in the home market for the first half of 2021 and secured the No. 5 position, or 2.6% of the market.

"Google has invested significantly into a few key markets where it has been able to grow significantly. The U.S. is the best example of this," said Runar Bjorhovde, an analyst with Canalys. He said Google is also doing relatively well in Japan and the United Kingdom.

Despite the recent upward trajectory, Google's Pixel is nowhere near the scale of other Android phone giants or iPhones. For comparison, Apple sold over 235.7 million iPhones in 2021, while Samsung shipped over 272 million Android smartphones in the same year, according to market researcher IDC.

"When Google mentioned that Pixel 6 was the bestselling Pixel ever, it's definitely a good sign, meaning that they're starting to get scale," said Wayne Lam, senior director of research at CCS Insight. "But they're still very, very small and would obviously have a higher penetration rate in the U.S. market, but in international markets they wouldn't even register."

"It took six generations for them to finally get into the tens of millions of units. It's still a very, very slow ramp," he added.

Lam also said any attempt by Google to become a large-scale smartphone manufacturer would complicate its relationship with other handset makers that use the U.S. tech company's Android operating system.

"For Google, hardware is just a means to show off and promote their software and software businesses," he added. "Pixel served as a showcase of everything Google, all of its AI capabilities."

Tensor, Google's in-house mobile system on a chip, integrates a group of processing units and increases computing power in an energy-efficient way, and is key to realizing many of the Pixels' AI capabilities.

Google has touted Tensor as a key differentiator that could enable the company to stand out amid intensifying competition. However the Pixel line relies on Samsung for a lot of its components, including Tensor as well as electronic displays.

Lam said Google's relationship with Samsung is becoming "symbiotic in promoting the Android ecosystem."

At the Thursday event, Google also announced its first smartwatch, the Pixel Watch, which starts at $349. It gave a sneak peek of the Pixel tablet that will be released next year as well.


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