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| Google's Pixel 8 to Be Manufactured in India, Aims to Boost Premium Phone Sales |
In a surprising turn of events at Thursday's Google for India event in New Delhi, a video featuring Bollywood star Anil Kapoor in his iconic Mr. India avatar stole the spotlight as he promoted the latest Pixel 8 series. Following this star-studded start, Google's hardware head, Rick Osterloh, took the stage to make a game-changing announcement: the Pixel 8 smartphones would be manufactured in India for the first time. This decision may be the catalyst Google needs to cultivate a dedicated fan base for its premium Pixel phones in the world's most populous nation.
"Mainstreaming Pixel is certainly one of our goals in India," Osterloh told indianexpress.com, underlining Google's commitment to scaling its hardware business in the country for long-term growth.
For years, Google has faced challenges in establishing its Pixel brand in India. However, the revelation that the company plans to commence local manufacturing of Pixel phones next year could provide a significant boost to its hardware aspirations. While Google has not divulged specific details about its manufacturing plans, they have expressed their intention to collaborate with international and domestic partners to produce the smartphones in India.
What took many by surprise was Google's decision to produce the Pixel 8 in India, rather than an A-series mid-range Pixel phone. Osterloh emphasized that the success of the A-series Pixel played a crucial role in this decision. "The A series has been wildly successful around the world, offering an incredible value proposition for users," he stated. The move to produce the Pixel 8 in India is aimed at tapping into the high-end smartphone segment.
In India, the smartphone market has been traditionally dominated by low-cost and mid-range Android smartphones from Chinese players like Xiaomi, Oppo, and Vivo, as well as South Korea's Samsung. However, there has been substantial growth in the premium smartphone segment, contributing a record 17 percent to overall shipments in Q2 2023, according to Counterpoint Research. Apple, Samsung, OnePlus, and now Google, are all eyeing the high-end smartphone market, where average selling prices (ASPs) are higher, making it a lucrative opportunity.
"The growth of the premium segment of the smartphone market is incredible," Osterloh noted during a media briefing. "India's transformation from the eighth-largest premium market to the third within one year is truly remarkable. So, it's undeniable how important it is for us because we have a product line that happens to be priced above a certain price point."
Osterloh's explanation aligns with Apple's recent efforts to target aspirational, young consumers in India through local manufacturing and enhanced marketing strategies.
Osterloh, who previously worked with Motorola and joined Google as Senior VP of Devices and Services in 2016, has played a significant role in building the Pixel brand. While the original Pixel and Pixel 2 received favorable reviews, it was the Pixel 3 and Pixel 3 XL that made a profound impact on the smartphone market with their exceptional cameras. Pixel smartphones continue to feature impressive cameras, but Google now markets them as AI mobile computers.
"The market is growing so rapidly, and the nature of AI and the significant computing capabilities required to deliver it mean that our product line is a great fit for the market here," Osterloh emphasized.
Manufacturing the base version of the Pixel 8 in India is seen as a positive step, as it allows Google to save on import duties and potentially offer more competitive pricing to consumers, according to Neil Shah, a partner at Counterpoint Research. However, Google needs to expand its distribution channels and improve pre- and post-sales support to ensure success in India.
Alphabet, Google's parent company, doesn't provide specific numbers for Osterloh's group, but reports suggest the company has shipped 40 million Pixel smartphones since their launch.
This move, whether by Google or Apple, aligns with the Indian government's efforts to promote high-tech manufacturing in the country. India aims to become an alternative to China in smartphone manufacturing, and it hopes to attract companies like Google and Apple to produce their devices in India.
For Shah, Google's expertise in search and Generative AI will be key differentiators in selling Pixel smartphones in the country. Google has a real opportunity to compete effectively with OnePlus and Samsung in the INR 25,000 to INR 45,000 segment with its clean software, long-term security and software updates, and exceptional camera technology.