Google Pixel to generate $4 billion in revenue in 2017

According to the Business Insider, Morgan Stanley has estimated that the Google Pixel will generate almost $4 billion in revenue in 2017. Google’s latest and greatest flagship smartphone is expected to sell 5-6 million units next year.

For comparison, Apple sold 212 million iPhones in 2016, generating over $137 billion in revenue. In the last quarter itself, they sold around 45 million units, generating roughly $28 billion in revenue.

The bank also estimates the Pixel will be half as profitable for Google as the iPhone is for Apple. This is due to a higher cost of materials for the Pixel. However, Google will profit beyond sales of the phone, through what Morgan Stanley’s analysts call the Android user monetisation. It means the features included in the new device will help get users to spend more money on its apps, like the Apple’s app store.

Google Pixel: Economic Analysis

Features such as the Google Assistant, its camera and Daydream VR have generated a lot of interest already. The Google Pixel has deeper app integration, Android Pay, and raw computing power, which will ultimately lead to users spending more money on Android.

As research indicates, advertisers spend more on those who splurge on apps from the store. Hence, Google’s incentive for getting more people into its Pixel ecosystem is two-fold.