Has the Pixel Really Moved the Needle on Google Hardware? (Premium)

Like Microsoft, Alphabet/Google announced its quarterly earnings this week. But any mention of the new Pixel handsets was conspicuously absent from the discussion.

Which makes a Reuters report, Alphabet's hardware growth adds to strength in core ad business, so curious. Turns out it's based on what analysts think, not what Google reported.

Google's "smartphone ... products were gaining traction, analysts said." Followed by more hot air.

I'm curious what makes them think that the Pixel handsets are gaining any "traction" at all. Given that there is zero evidence of that.

In fact, there is evidence to the contrary.

A CNBC report, quoting a securities firm, estimates that Google sold only one million Pixels in the quarter. "CEO Sundar Pichai told investors that the company was thrilled with the reception of the Pixel," the report notes.

The Telegraph, meanwhile, noted that the Pixel might have been the reason Google missed profit expectations. "The high cost of launching its new Pixel phone ... took the shine off a leap in advertising income," the report notes. "Google has spent heavily on an advertising blitz to support them."

Truth is, Google said nothing about the Pixel beyond Mr. Pichai's being thrilled with the positive reviews it received. And as Microsoft does so often, it hides Pixel revenues in an unrelated business unit that also includes Google Cloud. That business unit experienced revenue growth of 62 percent YOY, but I would bet big money that was on Cloud, not Pixel. And that its revenues would have been much higher without the costs associated with Pixel.

Marketwatch seems to agree with me, though they did leave themselves an out.

"It's hard to say whether that increase in ‘other revenue’ was from Pixel or the cloud ... but Google is putting more emphasis on this call on the cloud than it is on hardware," Marketwatch live coverage of Google's earnings conference call notes. "Then again, the biggest percentage of the annual increase occurred during the fourth quarter, which included holiday and initial sales of the premium-tier Pixel phone."

(Someone did ask about Pixel during that call, but it was related to competitive issues with other Android phone makers. "Sundar is not scared about chasing Android partner OEMs away by making the Pixel," Marketwatch notes. I suspect that is partially due to low sales. It's Microsoft's Surface strategy, copied.)

Put simply, I don't feel that the Pixel is a meaningful departure from previous Nexus phones, nor do I think it's made a particularly momentous splash despite its high profile launch. More notable is that Google has inexplicably used this family of products to further fragment Android with Pixel-first and Pixel-only features. And has priced these middling devices in the stratosphere. Finally, as I noted in my review of the Google Pixel XL, for many of the things I really care about, like the camera, the previous-generation Nexus 6P handset is stil...