Google says Pixel sales are down, blames 'pressures' in premium segment

The Google Pixel 3 series earned a gong in our Best of Android 2018 Awards thanks to its computational photography credentials. Unfortunately, it seems like a great camera and fast updates weren’t enough to boost sales.

Google parent company Alphabet reported its Q1 2019 earnings results this week (h/t: 9to5Google), and it noted lower year-on-year sales for the Pixel series.

“Hardware results reflect lower year-on-year sales of Pixel, reflecting in part heavy promotional activity industry-wide, given some of the recent pressures in the premium smartphone market,” said Alphabet CFO Ruth Porat in the earnings call (skip to 7:51).

It’s unclear whether the company is blaming reduced demand in the premium smartphone bracket, increased competition in this space, or both. Nevertheless, it’s clear that the Pixel 3 phones were less successful than the Pixel 2 series in the quarter after launch.

The lower sales likely weren’t helped by the Pixel 3’s increased price compared to its predecessor. Google’s Pixel 2 and Pixel 2 XL launched at a starting price of $649 and $849 respectively, while the Pixel 3 and Pixel 3 XL start at $799 and $899. Those hoping for cheaper devices (like the Pixel 3a) might want to keep an eye on May 7, as Porat also confirmed that the event will focus on hardware.

“With respect to hardware results, while the first quarter results reflect pressures in the premium smartphone industry, we are pleased with the ongoing momentum for Assistant-enabled home devices, particularly the Home Hub and Mini devices and look forward to our May 7 announcement at I/O from the hardware team,” the CFO said.

Other than disappointing Pixel sales, Alphabet reported total revenues of $36.3 billion and operating income of $6.6 billion for the quarter. This compares to Q1 2018’s results of $31.1 billion in revenue and $7.6 billion in operating income. Alphabet claims it would’ve reported Q1 2019 operating income of $8.3 billion without its European Commission fine for abusive advertising practices. Do you think cheaper phones will boost Google Pixel sales? Give us your thoughts in the comments.

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