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Google's New Pixel Smartphones Might Benefit From Samsung's Woes

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The latest sales data from Kantar Worldpanel ComTech shows that in the three months ending August 2016, Android accounted for 65.2% of all US smartphone sales. This was down from 66.9% for Android during the same period a year earlier, as Samsung, LG, and Motorola all posted year on year Android sales declines in the US.

­Samsung was the top seller of smartphones in the US during the June to August period, before it terminated production of the Galaxy Note 7 due to a series of battery fires. Only a few days before that, Google unveiled the Pixel and Pixel XL, its new line of flagship smartphones.

"The Pixel could not have come at a better time for Google, with Samsung retiring the beleaguered Galaxy Note 7 and instructing users to power down the device and stop using it," said Lauren Guenveur, Consumer Insight Director for Kantar Worldpanel ComTech. "Carriers and retailers had already stopped sales and exchanges of the Note 7 after a number of replacements that had been considered safe caught fire."

The introduction of Google's Pixel could also be felt by Motorola, which was the fourth largest manufacturer in the US with 6% of smartphone sales in the three months ending August 2016, compared to LG at 13%, Apple at 31%, and Samsung at 33.9%.

"The Pixel is available exclusively on the Google store and through Verizon, and its pricing mirrors that of the iPhone 7 and 7 Plus -- $649 for the smaller version, and $769 for the larger one," Guenveur continued. "Some may be tempted to say that the new Google phones are bad news for Apple, but while they do compete on many of the specs and pricing, they are more likely to capture share from Motorola and Samsung."

It is unlikely that Google's first full-fledged foray into the handset business will result in a runaway success, Kantar Worldpanel ComTech analysts believe. While Google is a household name, its phones remain untested in the marketplace and, at such a premium price, consumers may not understand the value of the Pixel over a similarly priced, well-tested phone from more established smartphone manufacturers.

"After the recent launch of Apple's iPhone 7 and 7 Plus, it seemed likely that Samsung would drop into second place and the new Apple models would be the industry's top sellers through the holidays. Apple always has a jump in sales each year when the new iPhones are released," Guenveur said. "Ironically, the Galaxy Note 7, which represented 3% of smartphone sales during August, was intended to help elevate Samsung's sales against the new iPhones. Now, the Note 7 is gone, and both Apple and Google have strong alternatives. Those are three hard hits for Samsung."

Global Market Data Summary

The latest smartphone sales data also shows that for the three months ending August 2016, market share for both Android and iOS grew in Europe's five largest countries, representing 78.1% and 17.3% of sales, respectively. Market share for iOS declined in Urban China, falling to 13.5% of sales.

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Tags: samsung  google  android