Jefferies: Pixel phones to showcase Google's mobile offerings

Source: Flickr user Cory M. Grenier

The smartphones Google is expected to unveil tomorrow are aimed at flaunting the company’s mobile offerings as well as generating hardware revenues, Jefferies analysts said this morning.

The internet giant is widely expected to introduce two new Android phones during a high-profile media event tomorrow in San Francisco. The flagship devices, reportedly to be branded the Pixel and Pixel XL, are positioned to compete against the iPhone and other high-end devices, which would mark something of a change in strategy for Google, Jefferies suggested.

“Designed to compete more directly against devices like the iPhone, the Pixel devices should reflect Google’s new ‘more opinionated’ view around hardware and software design,” the analysts wrote in a research note distributed to investors this morning. “At an expected $650 price point they will be significantly more expensive than the Nexus devices ($350-$500 ballpark) that they are ostensibly replacing.”

The phones, which reportedly are being manufactured by HTC, will likely feature aluminum and glass construction and a headphone jack. The Pixel will offer a 5-inch screen while the Pixel XL’s screen is expected to be 5.5 inches.

The U.K. retailer Carphone Warehouse and the Canadian operator Bell stoked excitement for the new gadgets in recent days when both apparently prematurely listed the new devices on their websites, revealing specs and images, as Android Police reported. Both devices will be powered by Qualcomm’s Snapdragon 821 chip, Android Police noted, with 4 GB RAM, and will be available with either 32 GB or 128 GB storage options.

Both will have 12.3-megapixel rear-facing cameras, according to reports, 8-megapixel forward-facing cameras, fingerprint readers, fast charging and will run Android 7.1.

“In our view, Google ambition here is not merely revenue growth,” Jefferies analysts wrote, “rather the devices will serve as a top-tier hardware platform to showcase and drive usage of Google’s best-in-class software services.”

Google has never been a major player in the smartphone market, but the company appears to be stepping up its efforts ahead of what should be an active holiday shopping season. Apple appears to be enjoying strong demand for the iPhone 7, which could signal a return to growth for iPhone sales during the fourth quarter, BTIG Research noted last week.

Meanwhile, it looked as though Samsung had a hit on its hands with the Galaxy Note 7 before being forced to issue a worldwide recall for the handset due to problems with overheating batteries that sometimes caught fire or exploded. Samsung said last week that roughly 90 percent of Galaxy Note 7 users have chosen a replacement model “since products became widely available,” indicating most users are willing to stick with the brand.

But the recall clearly provides an increased opportunity for Google to gain ground with the Android users that have become Samsung’s bread and butter. Whether the company can capitalize on that opportunity might be determined in the next few months.

For more:
- see this Android Police report

Related articles:
More than 60% of recalled Note 7 units have been exchanged in U.S. and Korea, Samsung says
BTIG: Strong demand for iPhone 7 could lift Apple's return to growth in Q4
Samsung’s Galaxy Note 7 sales were up 25% over last year’s model - prior to recall