Google sees India crucial for its overall biz, slashes prices of Pixel phones

The company’s range of Pixel 8 series and 7a smartphones will see price reductions in line with India’s move to lower import duties on smartphones, as announced in the Union budget for FY25 on 23 July, Nanda Ramachandran, global vice-president of Google’s mobile business, said.

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“There is a big impact (of local manufacturing) that offers us a cost benefit on our hardware, which we can then pass on to our buyers. But, more importantly, having manufacturing capabilities in India has regulatory importance in today’s scheme of things. India's manufacturing ecosystem has also considerably developed, and there is increasing sophistication in the domestic supply chain ecosystem, which we can leverage going forward," Ramachandran told Mint.

His statement came on the sidelines of the global unveiling of Google's latest smartphones—the Pixel 9 series. This is the first time that the company launched its entire portfolio of new smartphones, as well as accessories such as the Pixel Watch 3 smartwatch and and Pixel Buds Pro 2 pair of earphones, in India.

Growing interest in India

The move marks Google's growing interest in India, where the Pixel phones have never quite taken off the way Apple has succeeded in the past two years with its iPhones, or Samsung with its Galaxy Z/S lineups of flagship smartphones. 

According to Tarun Pathak, director at market research firm Counterpoint India, Google’s share as of last year was a meagre 0.25% of the domestic smartphone market. For reference, more than 150 million smartphones were sold in India last year, and the country has an estimated 750 million active smartphone users as of the first half of this year.

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Google, therefore, sold less than 400,000 units of its Pixel phones in India last year. Pathak said that in the first six months of this year, Google’s sales of the Pixel smartphones rose to 0.4%—thus selling around 275,000 units so far.

Make in India

On Monday, Google also announced through its official social media platforms that the first batch of made-in-India Pixel 8 smartphones were ready to be shipped to distributors and retailers. Ramachandran added on Tuesday that going forward, the Pixel 8a is the next in line to be assembled out of a Chennai plant.

“As of now, we don’t have a timeline for when the Pixel 9 series will be built in India as well. But on overall terms, our approach will be to bring the best of our offerings to India, and building locally does help in cost benefit as well as building scale in the India market—both of which we’ll do going forward," he said.

This has sparked optimism among some.

“We expect sales of Google’s Pixel devices in India to grow 3x within one year. The generative AI and camera capabilities are likely to boost momentum for Google, and channel expansion and local manufacturing mean better pricing. Enterprises could be a key customer for Google as well," said Counterpoint’s Pathak.

Google’s hardware business

The cost benefit for Google’s hardware business is also coming from India’s recent reduction of import duties on mobile phones, printed circuit board assemblies (PCBAs) and chargers of phones. The Union budget reduced the duties from 20% to 15%. Ramachandran said that this has led to a reduction of prices for Google’s entire range of Pixel 8 smartphones, as well as the Pixel 7a.

The price revision is to the tune of 4.5-6.5% across all eligible devices—which are now cheaper by between ₹2,000 and ₹7,000.

Many others, however, aren’t convinced that hardware will be a key factor for Google—and its local manufacturing claims are more strategic than functional.

A senior industry consultant who works with multiple smartphone brands said on condition of anonymity, “If you look at the India market, Google hasn’t managed to scale to even 1 million units per year, while Apple has proved that it is possible to build a viable premium business in India, especially today. This is because hardware is not Google’s primary bread and butter—smartphones account for a mid-single-digit percentage of Google’s parent Alphabet’s net global revenue. For Google, it’s about throwing their weight behind the Centre’s local manufacturing push. This puts them in a favourable position because so far, Google was the only brand that was entirely importing its hardware from abroad."

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Google on Tuesday also officially launched for the first time in India its foldable smartphone, the Pixel 9 Pro Fold, priced at ₹172,999. The latter joins an increasing number of foldable smartphones in the country from brands such as Samsung, OnePlus, Vivo, Oppo and Motorola—and ranks Google as the most expensive of the bunch alongside market leader, Samsung.