Sales of the Google-made Pixel smartphone are falling, company executives said in its first quarter earnings call on Monday, further pointing to the tech giant’s struggle to build a meaningful hardware business.
Though Google is typically tightlipped around such metrics, CFO Ruth Porat shed light on the Pixel struggles to explain its slowing year-over-year growth for “other revenues” – which include revenue channels, like cloud and hardware, that are outside its core advertising business.
“Hardware results reflect lower year-on-year sales of Pixel, reflecting, in part, heavy promotional activity industrywide given some of the recent pressures in the premium smartphone market,” Porat said.
Growth in Google’s “other revenues” slowed from an increase of 35% year-over-year in 2018 to 25% in 2019. The tech giant’s parent company Alphabet saw its stock drop over 7% in after-hours trading on Monday.
Sundar Pichai’s point of view in selling pixel phones.
“Phones definitely across an industry, I think we are working through a phase where there is definite year-on-year headwinds,” Pichai said, never explaining what those “headwinds” actually entail. “But I do think, especially since the ecosystem is constantly pushing it forward, I continue to be excited about the innovation speed.”
The chief exec pointed to the rise of the ultra-fast 5G wireless standard and the rollout of the first foldable phones – which he says “Android plays a big part in driving” – as smartphone developments that excite him most.
Recently, Samsung – the first major smartphone maker to release a foldable smartphone – was forced to push back the release date for its device after early reviewers discovered major hardware flaws.