Morgan Stanley: Google's new Pixel smartphones will generate $3.8 billion in revenue next year

Morgan Stanley analysts expect Google to sell $3.8 billion in Pixel handsets next year

Morgan Stanley analysts expect Google to sell $3.8 billion in Pixel handsets next year


Analysts working for Morgan Stanley are expecting Google to garner revenue of $3.8 billion next year from sales of its Pixel smartphones. The Google Pixel and Google Pixel XL are the first smartphones designed by Google. To generate this amount of money from sales of the Pixel models, Morgan Stanley sees 5 million to 6 million units to be rung up in 2017.

For the fourth quarter of 2016, which covers the holiday shopping season, Morgan Stanley expects 3 million Pixels to be sold. That would result in sales of $2 billion for the quarter. According to the note, the higher cost of materials used by Google to produce the phones means that each Pixel sold is approximately half as profitable to the company as each iPhone sale is to Apple. The Pixel provides a gross margin of 22% to 25% depending on the model. The iPhone's gross margin is 41%

Morgan Stanley says that the Pixel handsets will close the gap that currently sees iOS users spend three times more for apps than Android users. The securities firm's analysts reach this conclusion because of the Pixel's improved integration of Android, which allows Google to push mobile payment service Android Pay. Others reasons to expect Pixel users to buy more paid apps include the phones' higher-end specs when compared to older Android phones.

The Google Pixel carries a 5-inch AMOLED screen with a 1080 x 1920 resolution, and is priced at $649.99 for 32GB of internal storage, $749.99 for 128GB of native storage. The Google Pixel XL sports a larger 5.5-inch screen with a higher 1440 x 2560 resolution. The Pixel XL containing 32GB of native storage is priced at $769.99, while the same phone packed with 128GB of storage is $869.99. Both models come with Android 7.1 out of the box.

While the phone is considered a Verizon exclusive in the U.S., the device does work on other carriers' networks. T-Mobile ran a promotion that offered buyers of the 32GB Pixel half of their money back if they activated the phone on T-Mobile. The handsets can also be bought for Google's Project Fi hybrid carrier. The operator works using Wi-Fi connectivity with T-Mobile, Sprint and U.S. Cellular service employed in areas without a Wi-Fi hotspot.



Morgan Stanley: Google's new Pixel smartphones will generate $3.8 billion in revenue next year
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source: BusinessInsider

Related phones

Pixel
  • Display 5.0" 1080 x 1920 pixels
  • Camera 12.3 MP / 8 MP front
  • Processor Qualcomm Snapdragon 821, Quad-core, 2150 MHz
  • Storage 128 GB
  • Battery 2770 mAh(26h talk time)
Pixel XL
  • Display 5.5" 1440 x 2560 pixels
  • Camera 12.3 MP / 8 MP front
  • Processor Qualcomm Snapdragon 821, Quad-core, 2150 MHz
  • Storage 128 GB
  • Battery 3450 mAh(32h talk time)

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70 Comments

1. Klinton

Posts: 1408; Member since: Oct 24, 2016

Outside US patriotic market, Pixel is total flop.

6. LebronJamesFanboy

Posts: 671; Member since: Mar 23, 2013

Flop or not, Pixel XL is the top android phone out right now.

9. Mxyzptlk unregistered

Those bezels are awful. Why didn't they stick with dual ffs?

11. aegislash

Posts: 1437; Member since: Jan 27, 2015

Right? At least Apple's huge bezels are justified by the home button. Pixel bezels are just wasted space.

12. kiko007

Posts: 7469; Member since: Feb 17, 2016

I think the bezels give it character.......albeit a little too much character. :D

21. Mxyzptlk unregistered

And a really big chin lol.

29. Scott93274

Posts: 6025; Member since: Aug 06, 2013

Love handles? lol, sorry, I had to.

31. kiko007

Posts: 7469; Member since: Feb 17, 2016

Bingo! #Ladieswithextracanbesexy!

34. Scott93274

Posts: 6025; Member since: Aug 06, 2013

I had to say that because I called the bezels love handles on the iPhone a few months back, not making the same statement would result in a double standard.

19. vincelongman

Posts: 5611; Member since: Feb 10, 2013

There's still components under the bezel Top has: front camera, rear camera, headphone jack, laser AF, flash, mics Bottom has: speaker, linear vibration motor, USB Type-C, mics Plus the "big" batteries (relative to Apple's) So the Pixel's huge bezels are just as justified as Apple's, i.e. barely

20. Mxyzptlk unregistered

Any reason you saw fit to shoehorn Apple into this?

35. Scott93274

Posts: 6025; Member since: Aug 06, 2013

I think it's somewhat appropriate as the Pixel seems to be compared to the iPhone in regards to its aesthetics fairly regularly. You made reference to its aweful bezels and huge chin yet the same can be said for the iPhone, the only difference is that the battery in the Pixel is 50% larger than that on the iPhone justifying the extra bezel needed to accommodate the larger components. I don't think it's anything to get upset about. No one was trying to push anyone's buttons with the comment.

43. aegislash

Posts: 1437; Member since: Jan 27, 2015

I didn't even realize my comment was a response to Mxy at first. So I am truly not surprised by the response I got.

58. Mxyzptlk unregistered

Sure you didn't. Don't backtrack now.

61. Mxyzptlk unregistered

The iphone at least has the fps on the front whereas the 7 has stereo speakers. The Pixel doesn't have either. I can understand some parts of it but it not having ffs is a big deal breaker.

64. Scott93274

Posts: 6025; Member since: Aug 06, 2013

Ah, but one might argue that it's poor placement of the fps, maybe it's because of my usage, but I would prefer the scanner on the back, out of the way, yet placed naturally where your index finger is. I will say that I would prefer front facing speakers, though I don't think that would be justification for a larger front bezel as we've seen from other OEMs that they can be present without a massive bezel. But lets not kid ourselves here, you've only ever been critical of Google and only praised and forgiving of anything Apple has done.

42. aegislash

Posts: 1437; Member since: Jan 27, 2015

Mxy, just making a comparison. No need to dump your salt all over me.

55. NoToFanboys

Posts: 3231; Member since: Oct 03, 2015

That overflowing amount of salt of his has to go somewhere right?

60. Mxyzptlk unregistered

Still not living up to your name I see.

65. NoToFanboys

Posts: 3231; Member since: Oct 03, 2015

Why? Because anyone arguing with you is automatically an Apple hating Fandroid, right? LOL

59. Mxyzptlk unregistered

You're the salty one.

54. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Not buying any phone with that amount of bezels. Pixel or no Pixel.

72. sgodsell

Posts: 6739; Member since: Mar 16, 2013

The Bezels are there so the screen is centered, therefore making it easier to center the Pixel smartphones in a VR headset like their Daydream VR headset or Cardboard. Also front facing speakers would suck for any VR headset. The sound would get muffled inside a VR headset.

24. Klinton

Posts: 1408; Member since: Oct 24, 2016

'Pixel XL is the top android phone out right now' ROTFL Who says so?

26. kiko007

Posts: 7469; Member since: Feb 17, 2016

I do....gotta problem?

30. Scott93274

Posts: 6025; Member since: Aug 06, 2013

Umm.... pretty much every tech media outlet on the internet...

37. trojan_horse

Posts: 5868; Member since: May 06, 2016

And those same media outlets called the Samsung's flagship the best Android phone currently on the market... no?

40. kiko007

Posts: 7469; Member since: Feb 17, 2016

It was......until....you know. (Not gonna say it for fear of "troll" labels)

46. aegislash

Posts: 1437; Member since: Jan 27, 2015

I'll do it for you, Kiko. #EXPLOSIONGATE #C-4GATE

47. trojan_horse

Posts: 5868; Member since: May 06, 2016

aegislash, what is it, huh? I didn't even specify the Samsung flagship I was talking of... The S7 Edge was called the best droid on the market by those aame media outlets... And, other than the S-Pen, the S7 Edge isn't much diferrent from the Note7 which you are #hashtags about.

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