Made By Google Might Finally Mean Business with Pixel 4

The Made by Google team surprised everybody on Monday when Brandon Barbello, a Product Manager for Pixel posted a blog sharing an early view of two features coming to the Pixel 4 expected to launch in the fall. This week’s blog adds to the confirmation of the Pixel 4’s existence tweeted by the head of Made by Google Rick Osterloh.

Yes we are making a #Pixel4 https://t.co/FkqmOqts0u

— Rick Osterloh (@rosterloh) June 13, 2019

So, we now know there is a Pixel 4 coming int the fall, October is the month most people have their money on, and we also know a couple of features: motion sense and face unlock.

Motion Sense and Face Unlock

The Motion Sense feature builds on the work that Google has been doing for years under Project Soli. Motion Sense is a series of radar-based sensors that can track nearby movement. One use case shown in the video released with the blog is to use your hand to gesture a flick from right to left to change music tracks. Other use cases mentioned are snoozing alarms and silencing calls. But, possibly the most interesting use case, Barbello mentioned in the blog, is the ability for Soli to turn on Face Unlock after detecting your movement and intention to unlock the phone. Prepping the phone to scan your face and then unlock would then seem like a single seamless step to users. If you have been using Face ID on an iPhone, you know that you need to lift the phone to unlock it, but while these are two distinct steps, it hardly feels that way to me. What does sound appealing from the blog, is the claim that face unlock “works in almost any orientation – even if you’re holding it upside down.”

The speed and ease of use of face unlock does not come at the expense of security, points out Barbello, highlighting that users will be able to use it for secure payments and app authentication. We’ll see once it ships, but I am certainly excited to add this feature to Pixel because even if I have no complaints on the fingerprint scan of the Pixel 3 and 3a, I have come to appreciate Face ID on my iPhone and my iPad Pro.

Talking about security, Google points out that facial scans will not leave the phone and will be stored in the Pixel’s security chip Titan M.

Interestingly, on the same day, the blog was published, we also received confirmation that
Google is asking consumers in the streets to scan their faces in exchange for a $5 gift card. Google explained that the purpose of this face canvasing was to assure as broad a dataset as possible so that as many people as possible would be able to use face unlock on Pixel 4.

Why this Openness?

While the features Google shared in the blog are exciting, I am actually more excited in the approach that Google has taken with Pixel 4.

Over the years, I have been criticizing Made by Google for not being aggressive enough with their hardware strategy. Pixel was a step up from Nexus, but the first generation suffered from a small channel and very little advertising. Pixel 2 saw still a limited channel but more marketing dollars. Finally, Pixel 3 saw strong advertising and a broader go to market approach. Sales remain concentrated in mature markets, and overall market share remains limited, but Sundar Pichai called out on Alphabet’s earnings call last week the strong performance delivered by Pixel 3a.

Judging Pixel’s performance as a proportion of the overall market, however, is not the best way to assess how Google is doing. After all, Pixel is not intended to appeal to the whole breadth of the smartphone market. Google is interested in those consumers who can be highly engaged not just with the device but with Google services as well. This limits the addressable market both by geography and income.

Because of the target audience, I see Google’s best opportunity to drive sales resting in Samsung and Apple’s installed base. If we go by the schedule all companies have kept over the past couple of years, we know both Samsung and Apple will have new models in the market before Pixel 4 is out. Samsung’s Unpacked is scheduled for August 7, and here we are expected to see the new Galaxy Note, then Apple is expected in early September.

While some people were quick to speculate about Google’s lack of concern for cannibalizing Pixel 3 sales, I appreciated the attempt to get people’s attention before competitors drop their products. All Google needs to do is instill enough interest to get people to wait for Pixel 4 to launch before committing to the new Galaxy Note or the new iPhone. At the end of the day, if you are in the market for a Pixel now, and your purchase is not an emergency, you are most likely going to wait and see the new model and any price adjustments on the current one. So, really, no harm no foul on Pixel 3.

Android and Google

The Android ecosystem has changed quite a bit over the past couple of years. The initial blossoming of brands jumping on the opportunity Android offered to get to market faster and with limited investment was not enough to sustain brands that had been in the mobile phone market for decades.

Chinese brands started to grow presence at home and soon internationally, first in Asia and then in Europe. While benefitting the overall Android ecosystem, this growth did not necessarily benefit Google as many of the brands were working on their own ecosystem or in collaboration with more regional ecosystem owners. Pixel came to market to address this changing dynamic as well as provide the best experience Google has to offer by bringing hardware, software, and services altogether with the added value of intelligence.

In a way, the balance that Google has been trying to keep between fostering the Android ecosystem with partners and pursuing its own hardware ambitions has become a self-determined balance. Depending on the market you are in, you see Android more or less intertwined with Google. In markets such as the US and Europe, Google services are such as an integral part of the Android experience that it is hard for consumers to separate the two. These are the markets where a more aggressive strategy for Pixel has the potential to pay off. In markets where Google services are not available or not preferred it is going to be harder for Pixel to grow share, as the competition would mostly be on hardware against local vendors who have a different go to market strategy, time to market and a focus that is more “local” than global.

The current political climate that is putting a lot of uncertainty on Huawei is another reason why, for Google, Pixel has become a more significant need than before. Huawei posted good results just this week despite the current situation, but retailers in Europe have been concerned about inventory levels and increased weakness in consumer demand mostly linked to the unclear long-term software support. Of course, there are alternatives to Huawei in the market, but outside of Samsung, none is particularly strong across geographies. Those alternative brands, like Oppo, Xiaomi, OnePlus are in a place of growth and opportunity but not at a point of being able to walk away from Google if faced with a stronger Pixel competition.

A simple way to think about the role of Pixel today is that Made by Google might have started because Google needed Pixel, but now Android needs Pixel too.