Is Google serious about its smartphone business?

Google, the world’s largest search engine operator, will host its annual developer conference on Tuesday.

The company is expected to unveil updates to its Android operating system as well as other new initiatives related to its smart home ecosystem.

But market observers are also hoping it will launch a mid-range Pixel model to boost its share in the highly competitive smartphone market.

Google has been running a small-scale smartphone business over the past few years under the Pixel brand. The rather pricey smartphone series, however, has never played an important role in the company’s business portfolio, even though its Android operating system dominates the market with an almost 90 percent share.

Unlike other smartphone brands such as Samsung, Apple and Huawei, Pixel is not sold globally. It is only sold in selected markets such as the United States, Britain and several other European countries.

With prices starting at US$800, Pixel has never been competitive in the market. Nevertheless, it can lock up a small group of die-hard Android fans.

Sundar Pichai, chief executive of Google’s parent Alphabet, said last week that the company’s weak hardware results reflected lower year-on-year sales of Pixel, as he noted the heavy promotional activities in the industry in view of recent pressures in the premium smartphone market.

In a bid to boost its market share, Google plans to offer the new devices at a competitive mid-range price point, with mid-range specifications.

The company’s latest smartphone series reportedly comprises Pixel 3a and Pixel 3a XL, which will be priced from US$399 and US$479 respectively. Rumors have it that the phone will be equipped with Qualcomm Snapdragon 670 processors, 4GB of RAM, 12-megapixel rear cameras, and 3,000mAh batteries.

Still, the outlook for the Pixel 3a series is not that attractive given its traditional form factor. The phone does not have a full-screen design or fingerprint sensor on the screen. It’s not using the top processor.

All this means the new products are not directly competing with other flagship products in the market.

Google is aiming to capture the fast-growing mid-range market, which is price-sensitive but on the lookout for high-class products.

The Apple iPhone XR is designed to cater for such a “sandwiched” group of users, and Google wants to target the same group.

One of the killer applications on the latest Google Pixel is the camera. Market watchers believe the Pixel 3a will come with the same top-tier camera system used in the Pixel 3 series. And while the price of the phone is halved, the camera quality will be about the same.

But aside from that, what else?

Perhaps Google’s main issue is that it is also the operator of the Android platform. While it offers Android software for free to hundreds of smartphone makers around the world, it is also developing its own smartphone using the same system to compete with peers.

As such, Google, if it sells its Pixel phones aggressively, may face criticism that it is trying to take market share from its partners.

Still, Google is committed to the growth of its hardware business, including smartphones, smart speakers and other devices. With regard to the smartphone, the company completed its US$1.1 billion acquisition of the HTC smartphone team last year.

Pichai said the smartphone business weakened on a year-on-year basis, but he believes the ecosystem is constantly pushing it forward.

The advent of the 5G era and the launch of the foldable phone indicate that the business is going through a new phase of innovation, and Android will play a big part in it.

Does that mean Google will launch a 5G foldable-screen Pixel smartphone this fall?

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