Google Remains a Niche Player in the Smartphone Market

Google unveiled its latest flagship smartphones at its annual Made by Google event on Wednesday. And while most of the specs and features of the new Pixel 8 and Pixel 8 Pro had been leaked before the event, there was one announcement that had fans genuinely excited: Google promised that the new phones would get seven years of Android OS, security and Feature Drop updates, addressing one of the biggest problems in the Android landscape and putting it ahead even of the latest iPhones, which typically get new iOS versions for five to six years. As expected, both the Pixel 8 and Pixel 8 Pro saw a $100 price hike compared to last year's models. Starting at $699 and $999, respectively, they are now firmly in "flagship phone" territory, albeit at the lower end of that spectrum.

Having worked with various hardware makers before, Google debuted the “made by Google” Pixel smartphones in 2016. But despite good reviews and attractive price points, the company never really cracked the smartphone market, selling just a fraction of the devices market leaders Samsung, Apple and Xiaomi move year after year.

According to Statista Consumer Insights, Google remains a niche player in the smartphone market to this day, with less than five percent of smartphone users calling a Google device their main phone in most major markets. As our chart shows, Google phones are most popular in Canada and the U.S., where they're used by 5.3 and 4.6 percent of smartphone users, respectively. And yet, according to Canalys estimates, Google only shipped 2.6 million smartphones in North America in the first half of 2023, while market leader Apple shipped 35 million iPhones.

Thankfully for Google, or its parent Alphabet to be more precise, the company doesn't rely on smartphone sales the way that Apple does. Last year, the operating segment that includes all of Google's hardware products as well as Google Play, YouTube subscriptions and other products and services accounted for just 10 percent of Alphabet's total revenue, while advertising accounted for roughly 80 percent. At Apple, the iPhone alone accounted for more than 50 percent of total sales in fiscal 2022, clearly illustrating where each company's priorities lie.