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Google Executives Sound More Optimistic About Pixel Phones

Gerrit De Vynck
(Bloomberg) -- Google executives sounded more optimistic when it comes to one of the company’s less-successful products: its in-house smartphone business.Since 2016, the Alphabet Inc. unit has invested heavily in a bid to build a competitor to Apple Inc.’s iPhone. It’s been a tough road.Earlier this year, Chief Financial Officer Ruth Porat was dour about the company’s flagship handset. “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,” she said at the time.But on Thursday, during Alphabet’s second-quarter earnings conference call, the mood was different.“With the launch of Pixel 3a in May, overall Pixel unit sales in Q2 grew more than 2x year-over-year,” Chief Executive Officer Sundar Pichai said, referring to a newer, cheaper version of the smartphone.Porat, whose job is to make sure the company doesn’t overspend, called the launch "successful" and said she was “pleased with the reception of the Pixel 3a line-up."Google doesn’t say how many phones it sells, and revenue from the business is obscured as part of the company’s Other division, which includes cloud computing and other consumer hardware. But the comments from Porat and Pichai were noticeably more upbeat than earlier in the year.The company is also spending heavily to promote the new phones. Marketing for the Pixel 3a was a major source of expenses in the second quarter, Porat said.To contact the reporter on this story: Gerrit De Vynck in New York at gdevynck@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Google executives sounded more optimistic when it comes to one of the company’s less-successful products: its in-house smartphone business.

Since 2016, the Alphabet Inc. unit has invested heavily in a bid to build a competitor to Apple Inc.’s iPhone. It’s been a tough road.

Earlier this year, Chief Financial Officer Ruth Porat was dour about the company’s flagship handset. “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,” she said at the time.

But on Thursday, during Alphabet’s second-quarter earnings conference call, the mood was different.

“With the launch of Pixel 3a in May, overall Pixel unit sales in Q2 grew more than 2x year-over-year,” Chief Executive Officer Sundar Pichai said, referring to a newer, cheaper version of the smartphone.

Porat, whose job is to make sure the company doesn’t overspend, called the launch "successful" and said she was “pleased with the reception of the Pixel 3a line-up."

Google doesn’t say how many phones it sells, and revenue from the business is obscured as part of the company’s Other division, which includes cloud computing and other consumer hardware. But the comments from Porat and Pichai were noticeably more upbeat than earlier in the year.

The company is also spending heavily to promote the new phones. Marketing for the Pixel 3a was a major source of expenses in the second quarter, Porat said.

To contact the reporter on this story: Gerrit De Vynck in New York at gdevynck@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.