Google's Pixel phone, real threat to Apple's iPhone

Google is embarking on a wholesale revamp of its mobile phone strategy, debuting a pair of slick and powerful handsets that for the first time will go head-to-head with Apple Inc.’s iconic iPhone.


Alphabet Inc.’s Google on Tuesday unveiled the Pixel and larger Pixel XL, the first phones that were conceptualized, designed, engineered and tested in-house. The Pixel handsets feature a Siri-like virtual assistant, flashy camera features and are the first to boast Android’s new Nougat 7. 7.1 operating system.

Their debut signals Google’s push into the $400 billion smartphone hardware business and shows that the company is willing to risk alienating partners like Samsung Electronics Co. and LG Electronics Inc. that sell Android-based phones.

“Google is now the seller of record of this phone,” said Rick Osterloh, chief of the company’s new hardware division. He notes that the company is now managing inventory, building relationships with carriers, sourcing components, making supply chain deals and managing distribution. Google is even making accessories, including cases and cables.

Until now, Google had satisfied itself with dipping a toe into the smartphone hardware business with the six-year-old Nexus program, a co-branding effort that outsourced the vast majority of development to other smartphone makers.

While well regarded, Nexus handsets were mostly a way for Google to experiment. But along the way, executives began to see the benefit of the Apple approach: a unified portfolio of consumer electronics products -- phones, tablets, watches, computers -- that lock users into its services.

Getting into the smartphone hardware business is a big, risky financial and operational commitment. But Google needed its own handset to ensure distribution for its web services, and more complex offerings like virtual and augmented reality. So in the summer of 2015, Chief Executive Officer Sundar Pichai approved the Pixel project; development began last fall.

“The difference with this device is that we started from the beginning,” says Dave Burke, who runs Android engineering. By contrast .. Google’s contributions to Nexus phones typically didn’t happen until they were 90 percent done.