Google Pixel Event: Conservative Hardware, Aggressive Phone Pricing
After months of previews, Google finally launched the Pixel 7, Pixel 7 Pro, and Pixel Watch. It also provided a fairly comprehensive early look at next year’s Pixel Tablet.
Pixel Tablet
Let’s start with the Pixel Tablet, because Google did a better job laying out a unique value proposition here than for its smartphones or the new Watch. Google surveyed the tablet market and concluded that most tablets are used in the home for content consumption and light computing tasks. Google can’t attack Amazon or TCL at the low end because Pixel is a premium brand. Google is also choosing not to answer Apple’s question, “what is a computer” and take on the iPad Pro because, after years of neglect, Android doesn’t have the software ecosystem to support being a PC alternative. That seemingly doesn’t leave Google much room for differentiation, but the one area where Google does have a fully built-out ecosystem is in home IoT, and it will lean heavily on that and content consumption when the Pixel Tablet reaches the market in 2023. A magnetic speaker dock turns the Pixel Tablet into a large Google Home, and while consumers will undoubtedly compare it to Apple’s base model iPad, the Pixel Tablet is really more of a competitor to Amazon’s Echo Show. That should be interesting.
Pixel Watch
Google’s much anticipated Pixel Watch runs Wear OS 3, so it should have a reasonable complement of apps along with contactless payment. It also has most of the health and safety features you’d expect on a smartwatch: continuous heart rate, sleep monitoring, single point ECG, and emergency notification. Fall detection is not available at launch, but Google promises it is coming in 2023. Skin temperature monitoring is not available, and it has none of the advanced GPS or hiking and diving capabilities of Apple’s Watch Ultra or dedicated sports watches. Six months of Fitbit premium is also included.
The Pixel Watch comes in just a single 41mm size – which makes it suitable for nearly any wrist size – and in three colors. The watch band system is unique without lugs; swapping bands appears to be straightforward, but until third party bands are available, you'll be limited to Google's own. Google does offer the Pixel Watch in both WiFi-only and WiFi/LTE for a $50 upcharge, and U.S. carriers are offering strong incentives for the LTE version, making it the better deal.
Google did not talk about performance, likely because the silicon is unimpressive. The Pixel uses Samsung’s old Exynos 9110 SoC plus a Cortex M33 co-processor added for low-power actions; this is the same SoC Samsung used back in 2018 for the original Galaxy Watch. Given the older, 10nm processor and relatively small size of the watch housing, battery life was seemingly not a major design consideration. Durability of the curved glass (not sapphire crystal) is another question mark, and there do not appear to be any unique security features – a highlight of the new Pixel phones.
Google’s Pixel Watch is pretty, but it offers little more than Wear OS 3 and Fitbit integration. That would be fine if this was early in the smartwatch adoption cycle, but it isn’t. Apple has had eight generations of watch evolution – Samsung has had even more – and the Apple Watch is now so good that it is locking people into Apple’s ecosystem. To keep people from slowly bleeding over to iOS, Android badly needs a successful watch beyond Samsung’s Galaxy Watch (which is excellent, but a little too Samsung-centric for anyone not using one of that brand’s phones). The Pixel Watch does not appear to be that watch, at least not yet.
Pixel 7 and Pixel 7 Pro
Google's Pixel is not a market share leader, but sales are growing, and Google considers Pixel -- silicon, AI/software, phones, tablets, accessories -- as a computing platform the company is investing in for the long term. Google's new phones are iterative updates with more powerful processors and better machine learning capabilities, but Google is pricing them quite aggressively.
In the public imagination, Apple owns privacy as a marketing message, partly thanks to its business model not depending as heavily on advertising, and partly thanks to its own ubiquitous ads on the subject. However, security and privacy are also a core strength of the Pixel 7. Google includes its own dedicated Titan M2 chip on each phone as part of its protected computing architecture that aims to keep less personal data in the first place, encrypt what data is kept, and keep more of that data on the phone rather than in the cloud. Centralized privacy and security settings make it easier to manage your permissions; this is a “Pixel first” feature, and will eventually come to all Android phones. The Pixel 7 includes a free VPN and Google is promising five years of security updates. Samsung will need to do a good job to explain how its Knox security suite improves on this (or simply differs); I attended a full briefing on the Pixel 7 security model and it wasn’t obvious to me, so your average IT manager or SMB business person is going to be absolutely lost.
The phones themselves are iterative updates from the well-received Pixel 6. The Pixel 7 gets a brighter screen, and updated dual rear camera. The Pixel 7 Pro has a variable refresh rate display, and triple camera array. Google continues to tweak its algorithms to ensure that different skin tones are represented accurately, especially in low light. A new guided frame feature helps blind/low vision people take better selfies, which is not just good for Google’s brand, but improvements in accessibility always help non-disabled people. Google’s AI magic can reduce blurry photos by using both cameras and machine learning; this is not a unique approach, but Google tends to do AI image manipulation really well. On the Pixel 7 Pro, photos can be taken at multiple zoom ranges from 2x to 30x thanks to a folded periscope lens, machine learning, resolution from main lens, and probably magic. Samsung’s S22 Ultra may be more flexible at extreme lengths, but the Pixel 7 Pro appears to be extremely competitive. On video, Google is trying to catch up to Apple with cinematic blur, better autofocus and image stabilization, better audio recording, and in-app integration with (select) apps. We will have to wait until we get time with review units, but Google is almost certainly still behind Apple’s iPhone 14 Pro here.
With the Pixel 6, Google moved from using Qualcomm Snapdragon SoCs to its own Tensor chip and Samsung modems. The Pixel 7 gets a Tensor 2, which runs machine learning up to 60% faster and is more battery efficient for phone tasks. Surprisingly, Google does not seem to have any really standout features that the Tensor 2 was aimed at enabling. Google’s voice recognition will now suggest and understand requests for emoji. This is incredibly useful, but hardly revolutionary. An upcoming feature update will enable Clear Calling to clean up incoming audio.
Google is pricing the Pixel 7’s aggressively – $100 - $200 below Apple and Samsung’s flagships – and is offering trade-in incentives for direct sales. All three national U.S. carriers are offering "free Pixel 7 with trade-in" deals for their most expensive service plans. However, the carriers are still offering slightly better deals on the iPhone, and most U.S. consumers buy premium phones on installment plans, so the price differential is minimized.
Part of Google's challenge is that smartphones are a mature market, and consumers are – understandably! – happy with Samsung and Apple. The Pixel line started with the notion that superb software could overcome mediocre hardware, and consumers didn't buy it until Google lowered prices with the "a" series. In recent years, Google has recognized that software is not enough, and has invested in competitive lens/camera arrays, better displays, and custom silicon. But the competition is stiff, and the core smartphone experience is fairly similar, so Google is also aggressively pricing the Pixel 7 and 7 Pro. Competitive prices, LG's exit, and the continued lack of competition from BBK Group and Xiaomi phones should help Google continue its sales growth in the U.S. The bigger news is that Google is expanding the number of countries it is selling Pixel in: Australia, Canada, Denmark, France, Germany, Ireland, Italy, Japan, Netherlands, Norway, Puerto Rico, Singapore, Spain, Sweden, Taiwan, UK, USA. The Nordic countries are new for the Pixel 7.
Google's hardware efforts need to be judged within the context of Google’s overall business. Google needs its phones to sell well enough to be profitable (economies of scale improve margins), but it is not trying to unseat Samsung and, by so doing, destabilize Android.
Home
Google is hardly the leader in in-ecosystem experiences, but it does offer quick pairing for earbuds, automatic WiFi login across devices, Find My, cast to TV, taking photos from Watch, etc. Every Pixel device is an IoT home control device with touch (updated Home app) or voice control. This is an area of strength for Google and it’s smart to lean into it across the board, not just with the Pixel Tablet.
Ahead of the Pixel event, Google launched several new Home devices on Twitter and its blog. These included:
A second generation wired Nest Doorbell with taller view to see packages
Nest WiFi Pro 6E mesh router system
Overhauled Google Home app (also coming to web and Wear OS
…and Nest Renew is now out of preview, enabling Nest thermostats to automatically adjust themselves to use greener electricity
These are all necessary updates, but hardly touch Amazon’s dozen+ announcements just a week prior.
To discuss the implications of this report on your business, product, or investment strategies, contact Techsponential at avi@techsponential.com or +1 (201) 677-8284.