Google's Pixel 2: Will It Succeed?

Are Google's Pixel phones a failure? After all, they only sell a million or so a year—far less than Apple and Samsung sell in a month, and well behind pretty much every Android phone maker you've heard of, including Blu.

As Google revs up to release its Pixel 2 phones today, it's worth asking what "success" means for Google with these devices. I've been debating that with some of the smartest minds in mobile for the past few days.

Theory 1: Pixel is Nexus

Google's Nexus line initially started out as an attempt to break US carrier control of cell phone sales through direct sales and the strength of Google's brand. The company gave up on that pretty quickly, retreating to a position where Nexus was the "pure Android experience" for developers, giving Android app makers a neutral, well-supported platform to write for, among the chaos of OEM Android skins.

Here's Rich Brome, the editor of Phone Scoop.

I don't think Sascha is joking and I agree with him. I think Google thinks of Pixel as serving its OS business, not as its own HW business.

— Rich Brome (@rbrome) October 3, 2017

In this theory, the Pixel line is a developer target and a showcase for Android. It sets the agenda for other Android implementations, showing what a "clean Google experience" can be and lightly slapping the wrists of manufacturers (like Asus and Huawei) that go too far afield. You don't have to sell a lot of phones to do this. You just have to sell them to influential developers who direct the way the platform is going. So far, that's been how Nexus/Pixel sales have shaped up.

One key corollary of this theory is that Google is trying not to threaten its OEM partners, like Samsung and LG, too much. It wants to set the agenda and provide an example, but also give Android licensees a lot of potential room to do their things and succeed. Google's position as the supposed neutral arbiter of Android is part of why it kept rotating Nexus manufacturing partners—HTC, then Samsung, then LG, then Huawei.

Success here means Google doesn't sell a lot of phones, but sells them to important people.

Theory 2: Pixel is Surface

Microsoft wants to make decent money on hardware, as a genuine business, so it's marketing the heck out of Surface laptops without much care for offending HP, Lenovo, or Dell. To some extent, that's because the other laptop makers are established enough to not feel threatened; to some extent, it's because they have nowhere else to go for their OS. HP isn't about to convert its business laptop lines over to Chromebooks out of spite.

Google may have that level of confidence, too. As mobile analyst Myriam Joire pointed out on her Mobile Tech Podcast this week, Google Play is the only app store in town if you're in many Western countries. While Amazon's Android spin-off tablets are popular, they're mostly used for consuming Amazon content. Tizen, Samsung's competing OS, has no apps. In this theory, Google's OS position is so strong that it has no fear of alienating Samsung: it can compete fully with Samsung as well as provide its OS, because Samsung has nowhere else to turn.

A million phones isn't success here. Google at least needs to sell at least 4-5 million Pixels to look like a player, if not a dominant player, in the hardware market.

Theory 3: Pixel pushes Google services

Here's a more nuanced take from Jackdaw Research head Jan Dawson.

Yeah, that's where I disagree. I think this is all about Google services, which means competing against OEM devices that bury them.

— Jan Dawson (@jandawson) October 3, 2017

The idea here, if I understand him correctly, is that Google is trying to create a unified suite of services that it wants to dominate the market. Google Assistant should crush not only Amazon's Alexa and Apple's HomeKit, but Samsung's Bixby. Pixels should become strong enough in the market to scare any Android vendors that think they might be able to build competing services back into line.

What's success here? Specifically, it means success against devices with competing service layers. Millions of Pixels with Google Assistant connecting to Google Home speakers and Chromebooks would be success. But millions of Motorola and LG phones that prioritize Google Assistant would also be successes, as long as people forget about Bixby. Notice here how Google is anointing Motorola in the midrange, with the Android One $399 Moto X4 on Google Fi.

Success here means that everybody's talking about Google Assistant and nobody's talking about Bixby, no matter how many Pixels Google sells.

That said, Dawson also says Google wants to sell a lot of Pixels.

Theory 4: Google wants to sell phones, but can't

I think Google wants to a sell a lot of very expensive phones. I think that's also quite hard. Even for Google.

— David Ruddock (@RDR0b11) October 3, 2017

That's David Ruddock, editor of Android Police, who knows more about what's going on inside Google from his network of leakers and inside sources than I do. TechnoBuffalo editor Justin Herrick appears to agree, pointing to Google's expensive investment in all those HTC employees.

Ehhh, I disagree. They want to be selling big-time. Why else would you ditch the Nexus program and not have partners make your hardware?

— Justin Herrick (@JustHerrick) October 3, 2017

The idea that Google wants to sell something and is failing can be pretty shocking, but there's precedent for that: the company had high hopes for the original Nexus, and had to roll them back. This theory sets the highest hopes for today's event, and for the results of Google's $1.1 billion purchase of 1,000 HTC employees: if it doesn't blitzkrieg the Galaxy S8, or at least the LG G6 and Huawei P10 out of buyers' hands, Google has failed again. We hope to hear more about Google's strategy today.

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