Google must have a good reason when it killed the Nexus brand in favor of the Pixel and Pixel XL smartphones. A new report indicates that profit is the chief motivating factor as the tech giant is projected to make more than $5 billion in revenues until the end of 2017 or around nine million of Pixels sold.
By yearend, Google is said to clear no less than three million Pixel devices or realized revenues of up to $2 billion, 9to5Google said, pointing to the report issued by Morgan Stanley. In the same estimation, the Pixel maker is seen push out nearly six million units of the flagship handsets that will lead to revenues of $3.8 billion.
In leaving behind the Nexus era, Google stands to make close to $6 billion in total sales with up to 25 percent in expected profit margins. And it is the 128GB Pixel XL that will prove as the biggest revenue generator for the latest smartphone line from Google while the cheapest of the bunch, the 32GB Pixel, will deliver 22 percent of profit margin.
The basic Pixel starts at $649 while the XL version with 128GB of memory sells for $869.
The Morgan Stanley estimate somehow justifies the decision by Google to retire the Nexus brand, which caused an uproar among hardcore Android fans. In the years of the Nexus circulation, the line is thought to be a commercial failure - unable to deliver profit to its maker.
Yet Google has always maintained that Nexus was designed to showcase the new features of each of Android OS iteration and the devices were sold nearly at cost.
That business model was apparently ditched with the Pixel thrust in which Google partnered with HTC. With the new flagships, the tech giant dumped the subsidy on handsets and marked the new phones with competitive pricing, nearly at the same level with that of Apple's iPhones and Samsung Galaxy models.
Additionally, the Morgan Stanley report indicated that with the Pixel phones picking up steam Google will also register marked increased in related services like mobile search and the redesigned Android Pay. Of note is that the same forecast was an aim that the tech giant had hoped to achieve with the Nexus line.
An aside, 9to5Google noted that the gains projected for the Pixel and Pixel XL are likely to the ill-fated Galaxy Note 7, which suffered recurring battery explosion that forced Samsung to pull the device model out of the market. In short, Samsung's loss translated to Google's benefits as will be seen in upcoming sales performance of the Pixel smartphone line.