Tech giant Google is focusing more on consumer affordable premium smartphones. Yes, Google CEO Sundar Pichai has predicted the future of their three business models – YouTube, Cloud, and hardware – over the past three years. Google’s parent company Alphabet Inc. listed YouTube and cloud revenues separately for the first time in its quarterly financial statements.
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Hardware
There were not many sales in the hardware segment. Sales fell short of the days when it was gifted electronic items. Pichai and chief financial officer Ruth Porat, who took over as CEO of Alphabet in December, did not specify the reasons for the sales downturn. However, the popularity of Google’s affordable smartphone and the demand for speakers with voice assist technology have created a great demand.
Investing in hardware
Executives have said they will continue to invest in the hardware segment, which could potentially surpass YouTube and the cloud in three years. Pichai said the hardware is still in the early stages of delivering our vision for ambient computing.
Billion-dollar business
Porat called the hardware division a multi-billion dollar business that traded at least $ 500 million in the quarter. YouTube revenues from ads and subscriptions rose to $ 5.5 billion (£ 4.2 billion) in the fourth quarter a year ago. Cloud computing quarterly sales were $ 2.6 billion, up 53%.
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Heavy competition
Earlier last year, Google’s Pixel 3 faced stiff competition from rivals, including Apple Inc.’s iPhone and Samsung Electronics’s Galaxy S series. Google then released the Pixel 3A, a low-cost device for $ 399. According to analysts and company, it has seen good sales.
Pixel 3A sales increase
Pixel 3A has increased Google’s smartphone sales to 4.1 million units in the first half of 2019, surpassing all of 2018, according to research firm IDC. The last time the Pixel 4 was released was a bad sell. Retailers sold it in January for a discount of more than $ 200.
According to Strategy Analytics, only 2.7 million smartphones out of the 375 million phones shipped globally in the fourth quarter belonged to the Pixel model. This is a disappointing show, no mistake.
Google Next from home
Last May, Google renamed several of its speaker products under the name Google Home, Google Next. But the demand for those devices has slid. Google’s market share declined in the first three quarters of 2019, with Amazon.com Inc.’s Echo Gadgets gaining more market share among television marketing.
Nest’s best selling
Provisional data from Strategy Analytics for 2019 shows Google Speaker traffic at 35%, which is boosted by fourth-quarter offering deals in partnership with Spotify and others. Pichai said the company’s Nest Mini and Nest Hub Max sold well for the holidays.
Google is looking to grow its hardware business with the acquisition of fitness tracker and smartwatch maker Fitbit Inc., pending approval from antitrust regulators. The hardware business could be hit if a new coronavirus outbreak in China causes a prolonged trade shutdown in Asia.
