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Google's Pixel 3a smartphone is less expensive but not a game changer

Driving on Interstate 101 from San Francisco to Silicon Valley, freshly updated billboards line the highway comparing Google's new Pixel 3a with Apple's iPhone X. The biggest difference being on the billboards is the price: $ 399 for the Pixel 3a versus $ 999 for the iPhone X. And below the prices, the text has a more subtle point: "One has Google," the billboard reads. "The other is Google." The billboards were part of a series of jabs at Apple that Google made during its annual developer's conference last week. During Tuesday's keynote, Google proudly showed off a side-by-side comparison of a photo-taking in a dark setting supposedly using an iPhone X and a Pixel 3a. With its Night Sight feature &#821 1; which essentially lets the camera see in the dark – the Pixel's photo was the clear winner. The amphitheater, filled with Google fanatics, erupted in cheer. Google The bullish feelings surrounding the pixel franchise were strong from the prior week when Google's CEO Sundar Pichai admitted to sluggish sales of his flagship Pixel 3. During Google's quarterly earnings call, industry-wide headwinds facing the high-end smartphone market – probably referring to the consumer trend or lengthening upgrade cycles. That "headwind," part, caused Apple's iPhone sales to decline by 20% last quarter compared to the same period the year before. But with the launch of a phone that is half the cost of its predecessor (the Pixel 3 is now priced at $ 799), Google is feeling particularly fresh.…

Driving on Interstate 101 from San Francisco to Silicon Valley, freshly updated billboards line the highway comparing Google’s new Pixel 3a with Apple’s iPhone X.

The biggest difference being on the billboards is the price: $ 399 for the Pixel 3a versus $ 999 for the iPhone X. And below the prices, the text has a more subtle point: “One has Google,” the billboard reads. “The other is Google.”

The billboards were part of a series of jabs at Apple that Google made during its annual developer’s conference last week. During Tuesday’s keynote, Google proudly showed off a side-by-side comparison of a photo-taking in a dark setting supposedly using an iPhone X and a Pixel 3a. With its Night Sight feature &#821

1; which essentially lets the camera see in the dark – the Pixel’s photo was the clear winner.

The amphitheater, filled with Google fanatics, erupted in cheer.

Google

The bullish feelings surrounding the pixel franchise were strong from the prior week when Google’s CEO Sundar Pichai admitted to sluggish sales of his flagship Pixel 3.

During Google’s quarterly earnings call, industry-wide headwinds facing the high-end smartphone market – probably referring to the consumer trend or lengthening upgrade cycles. That “headwind,” part, caused Apple’s iPhone sales to decline by 20% last quarter compared to the same period the year before.

But with the launch of a phone that is half the cost of its predecessor (the Pixel 3 is now priced at $ 799), Google is feeling particularly fresh.

“The Pixel 3a will get more notice from consumers,” Frank Gillett, a Principal Analyst at Forrester, told Business Insider in a recent interview. “And it will be a big step forward for Google in showing original equipment manufacturers [OEMs] and customers what the minimum bar is for quality Android phone at mid-market prices, as well as for premium smartphones.”

With the Pixel 3a, Google has been able to track many of the features from the Pixel 3 – including its impressive camera and automatic call screening – while keeping costs low with a powerful processor and cheaper, polycarbonate outer layer.

Read more: Here’s how Google’s new $ 400 pixel compares to the more expensive Pixel 3

Google’s camera strategy has been particularly important. While other companies, like Apple, have doubled-down on the best camera – which is pricey – instead it has focus on enhancements it can bring to photos with software and artificial intelligence. The cost of developing software is better than expensive hardware components, and over time, Google can offer competitive prices at a fraction of the price. That’s the idea, at least.

A wider ‘channel presence’

Besides more aggressive messaging against Apple, Google also flexed in front of competitors when it announced a broader distribution strategy for the Pixel 3a.

The Pixel 3 was only available at Verizon stores. That lack of “channel presence” with other carriers, Creative Strategies analyst Carolina Milanesi customs Business Insider in a recent interview, was the main reason for the product’s disappointing sales.

Pixel 3a Getty

On Tuesday, Google announced it would expand its coverage with the Pixel 3a also available in T-Mobile, Sprint, and US Cellular stores across the country. The latest Pixels can be purchased on Google Store as well as with any US carrier, including AT&T.

“It looks like like not just from a carrier perspective, but also the unlocked options you have, which at a $ 400 price, are much more than double the price,” Milanesi said.

Forrester’s Gillett agreed.

“The broader distribution will help Google reach a bigger set of buyers,” he said. “And the price will help too.”

Pixel’s precarious position

Yet, even as Google seems to find itself with the right product at the right time, the company’s unique positioning in the marketplace will likely hold it back from being a real threat to hardware giants like Apple or Samsung.

That’s because, besides its hardware business, Google also owns Android – the operating system for over 80% of phones worldwide. To keep device makers happy, Google has traditionally walked the tight rope when it comes to promoting its own hardware offering. And even with a new, less expensive handset, Google will need to continue to strike that balance.

Gillett believes the recent pixel launch will kick some concern with some OEMs, and ultimately help raise the bar for the $ 400 price point.

“Android device makers will be concerned that Google is competing with more, which it is,” Gillett said. “But they don’t exactly have many options. In the short run, they’ll have to up their game on device features and software services. “

Milanes, however, says that most OEMs will probably brush off the move by Google given its relatively small market share today. For Milanes, the pixel threat to major incumbents is probably more bark coming out of I / O, than bite.

“The Pixel brand has gained the respect of users in both the Android and iOS base,” she said, “We also need to be realistic, though, as a market share growth at a worldwide level.”

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