Google Pixel’s Strong Smartphone Sales Could Spark Big Growth for Android Pay
Google Pixel sales were much higher than expected in the fourth quarter 2016. The first smartphone produced directly by Google yielded $386 million in revenue for that quarter alone, according to reports from Bloomberg.
Approximately 552,000 devices were shipped in Q4, and Pixel phones accounted for 12.3% of phone activations through Verizon. This is the only carrier that currently supports Google Pixel, though customers can purchase an unlocked version of one online for upwards of $1,200.
The growth of Google Pixel could spark a new wave of Android Pay users. The mobile wallet is already available on many LG and Samsung devices, but many users are still skeptical about mobile wallets. Using a mobile wallet powered by Google on a device made by Google would be the best scenario, especially if the company comes out with a smartwatch to tie in with the Pixel smartphone.
This sales data does not reflect the number of Google Pixel devices sold outside the United States, meaning even more phones are now circulating on the market. Late last year, Morgan Stanley predicted Google Pixel would yield $3.8 billion in revenue in 2017, based on selling 5-6 million phones. If Pixel becomes available with other carriers other than Verizon, those projections would be low.
The success of Pixel sales came at a price. Google spent a great deal of advertising money on the phone, including $45.9 million in 2015 and $109.8 million in 2016 during just the fourth quarters. Verizon paid for an additional $57.1 million on Pixel-specific ads.