Alphabet Inc. (GOOGL) is set to re-enter the smartphone market with the launch of the Pixel 6 Series, powered by Google’s Tensor chip.
On October 19, the company unveiled its flagship devices, Pixel 6 and Pixel 6 Pro, at a launch event dedicated to these smartphones. The new smartphones are powered by Google Tensor custom-built chips that provide improved machine learning and artificial intelligence (AI) capabilities, while the Titan M2 security co-processor is used to protect the personal data of users.
Pixel devices were first introduced in 2016, but Google has not been successful in winning market share from other established smartphone manufacturers so far. The launch of the Pixel 6 series, however, could turn things around as these devices are packed with powerful innovative features.
I am bullish on Google, as the company successfully executes its diversification plan to increase non-advertising revenue. (See Analysts’ Top Stocks on TipRanks)
On October 19, Google announced the technical specifications for its new smartphones, which include significant advancements in photo and video processing, as well as services such as voice-to-speech and translation.
The Pixel 6 series has certain unique capabilities, such as Magic Eraser, which helps users to remove background objects from images. Other preloaded camera features include Face Unblur, which eliminates blurring from moving subjects, as well as Manual white balancing, Motion Mode which includes Action Pan and Long Exposure choices, and Real Tone to provide accurate colors.
These innovative camera features are likely to grab the attention of the new generation of smartphone users, which is a good sign for Google.
Google Tensor chips enable voice-to-speech and live translation that supports many languages, including English, French, Japanese, Spanish, German, Italian, Portuguese, Simplified Chinese, Hindi, Polish, and Russian.
Further, live translation is extended to live captions, audio recorder, and camera as well, where Tensor enables sign translations and live video captions in up to 55 different languages, without an Internet connection.
The new phones come with the Android 12 operating system, which includes a feature called Material You that automatically matches the wallpaper to icon colors and menu text. In addition, these phones are also designed to help prevent spam calls and messages, including spam content on Internet-based platforms such as WhatsApp, Messenger, and Instagram, by blocking them and alerting the user.
Google also said that the new Pixel series will receive a total of five years of OS update support, alleviating any concerns regarding a premature abandonment of support.
Along with the launch of these new devices, Google also launched Pixel Pass in the United States, a subscription service starting at $45 per month with a Pixel 6, and $55 per month with a Pixel 6 Pro that will include device protection, 200 gigabytes of storage, automatic phone backup, and access to the premium versions of YouTube, YouTube Music, and Google Play Pass.
Addressing Previous Concerns
Google is laser-focused on improving the quality of its latest Pixel smartphones, which is why the company is using a custom-built, upgraded processor. The lack of a formidable processor was the primary reason why previous versions of Pixel devices failed to keep up with the competition.
Although Google’s Android operating system is installed on more than 3 billion devices worldwide, the company has struggled to position itself as a smartphone brand because of quality issues, and the company seems to be finally addressing this concern.
A few other reasons for the failure of Pixel devices were problems related to connectivity, unexpected battery shutdowns, and some issues related to the camera.
However, Google Pixel is still widely considered to have best-in-class camera capabilities, and the launch of the new Pixel series with updated camera features and other unique characteristics might help Google gain some traction in the smartphone industry.
The favorable outlook for this industry resulting from the rollout of 5G technology will also be an advantage for the company.
Wall Street’s Take
Based on the ratings of 31 Wall Street analysts offering 12-month price targets for Alphabet stock, the consensus rating is Strong Buy.
The average Alphabet price target is $3,209.24, which implies 15.2% upside potential.
Many tech companies have begun to develop in-house processors instead of relying on third-party chip manufacturers, and Google joined this trend with the release of its Tensor chip in August.
Google is betting that its new chip, pricing, and subscription services will be enough to draw customers to the all-new Pixel smartphones. Although affordability was previously a primary focus for Google, the company is now targeting both mid-range and high-end markets with the launch of new devices, competing with leading brands in the industry.
At the time of publication, Dilantha De Silva did not have a position in any of the securities mentioned in this article.
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