Produced by I Xiahai fallsea

Written by I Hu Buzhi

On January 5, 2010, Google partnered with HTC to release the first Nexus One. The launch event took place at Google's headquarters in Mountain View, where then-CEO Eric Schmidt held up the phone, revered by geeks as Android's 'favorite son,' and said a phrase to the media and developers below that has since been repeatedly quoted: 'We hope this phone will become a benchmark for the Android ecosystem.'

Sixteen years later, in August 2026, Google will host its annual Made by Google hardware launch event in New York, unveiling four new models at once: the Pixel 11, Pixel 11 Pro, Pixel 11 Pro XL, and Pixel 11 Pro Fold. Judging by the information revealed in the invitation, the biggest selling point of this generation of Pixel phones remains AI interaction and on-device large models, with the most eye-catching hardware change being a back lighting effect called Pixel Glow.

Sixteen years—a complete cycle. But if you examine Google's phone performance, you'll find an incredible fact.

Apple captures over 80% of the global phone market's profits, a share that even approached 90% in 2025. Samsung remains the dominant player in the Android camp with annual shipments of about 240 million units. Xiaomi shipped approximately 164 million units globally in 2025, while vivo and OPPO maintained shipments of around 100 million units each. Chinese manufacturers collectively captured over 40% of the global market share.

And Google's phones? According to industry research estimates, Google produced about 9 million Pixel smartphones in 2024. This figure doesn't even match the monthly shipments of leading manufacturers. In global smartphone market share statistics, Pixel consistently accounts for less than 1%, firmly placed in the 'Others' category. Even in the U.S. domestic market, Pixel's share hovers between 3% and 5%, sometimes even selling less than Motorola, which focuses on the low-end market. In North America's foldable phone segment, Pixel holds about a 5% share, while Samsung dominates with 51% and Motorola follows with 44%.

Why can't a tech giant with the world's top engineering teams, annual net profits exceeding $130 billion, and a market value once surpassing $4 trillion make a best-selling phone after 16 years?

Outsiders often criticize Google, measuring Pixel by Apple's standards and concluding that Google can't do hardware. But this judgment overlooks a deeper business truth. From day one, Google never intended to make phones a profit center. Pixel's 'Others' status isn't the result of failure but a safety boundary Google actively chose to maintain its Android empire's broader ambitions.

Billboards Don't Need High Sales

Google's phone history clearly divides into two eras.

From 2010 to 2015, during the Nexus era, Google's phone positioning was explicit: developer reference designs. Nexus phones never had their own factories; HTC, Samsung, and LG handled all manufacturing. Their goal wasn't to sell to ordinary consumers but to show Android ecosystem allies what the Android system should look like, how it should interact, and how to optimize performance. They served as three-dimensional textbooks, mobile SDK showcases, rather than products needing mass distribution.

In 2016, the Pixel era began with a subtle but crucial strategic shift. Google started trying to emulate Apple's integrated hardware-software approach. The first-generation Pixel, released in 2016, started at $649, directly competing with the iPhone. Google even poached part of HTC's hardware team to build its in-house hardware division. In 2021, it began developing its own Tensor chips, attempting to eliminate reliance on Qualcomm at the foundational level.

On the surface, Pixel increasingly resembled a genuine phone company. But in reality, Google maintained a restrained distance in its Pixel investments. This restraint stems from the fundamental logic of Google's business model.

On February 4, 2026, Alphabet released its 2025 annual financial report. The numbers in this report would make any hardware company envious.

Annual revenue reached $402.836 billion, surpassing $400 billion for the first time, up 15% year-over-year. Net profit hit $132.17 billion, up 32% year-over-year. Fourth-quarter revenue alone reached $113.828 billion, up 18% year-over-year.

Breaking down the revenue structure in this report reveals that Google is essentially a sophisticated advertising and cloud services tax collection machine.

Fourth-quarter revenue from Google Search and other services reached $63.073 billion, up 17% year-over-year. YouTube advertising revenue hit $11.383 billion. Google Ads Network revenue reached $7.828 billion. Combined, these three segments contributed $82.284 billion in single-quarter advertising revenue. Annually, Google's advertising revenue totaled over $320 billion, accounting for about 80% of total revenue.

Another growth engine is Google Cloud. Fourth-quarter 2025 cloud revenue reached $17.664 billion, surging 48% year-over-year. Annual cloud revenue approached $70 billion, becoming Google's second growth curve. Meanwhile, Google's 'Other' revenue segment—including hardware products like Pixel phones, Fitbit smartwatches, Nest smart home devices, and YouTube subscriptions—generated approximately $30 billion in annual revenue, accounting for less than 8% of total revenue. Within this $30 billion, Pixel phone hardware sales revenue constitutes only a portion.

For comparison, Apple's iPhone product line alone generated $209.586 billion in revenue in fiscal 2025. Apple's overall gross margin consistently exceeds 45%, with hardware margins nearing 40%. Apple earns excess profit (excess profits) from hardware sales, supplementing them with service revenues from the App Store, iCloud, etc.

Google's business logic works exactly the opposite. The Android system is free; its purpose is to ensnare over 3 billion active devices globally, providing traffic entry points for Google's search ads, YouTube, Google Play, Maps, and cloud services.

Google is a company that collects taxes in the cloud through these services, with extremely high gross margins and virtually no inventory risks or after-sales costs. Phone hardware, however, is an entirely different business.

It involves complex supply chain management, component procurement, inventory turnover, channel distribution, and after-sales maintenance—earning meager profits of a few cents or dollars per unit. A phone's net profit margin typically remains in single digits, and inventory backlogs or component price hikes can even lead to losses.

A former product manager who worked in Google's hardware division for three years revealed in an interview that colleagues in hardware often self-deprecatingly say, 'We're the least profitable group in the company. What the search team earns in a quarter could sustain our entire hardware division for a decade.'

During annual performance reviews, the hardware department's presence feels minimal because its contribution to the company's financials is indeed negligible. If Pixel is so financially insignificant, why does Google continue making it? The answer lies in its strategic defensive value.

In the mobile internet era, the operating system represents the ultimate traffic gateway. Whoever controls the OS controls users' search habits, app distribution, and data flows.

Google launched Android in 2007 primarily to defend against Microsoft and Apple's mobile monopolies. If the iPhone became the sole smartphone platform, Google's search ads would be at Apple's mercy.

Pixel exists to ensure the Android ecosystem always has a pure, Google-controlled benchmark product. It must prove that Android can be as smooth, secure, and user-friendly as iOS.

It must provide an optimal hardware-software adaptation model with each new Android release. It must serve as the first experimental field for Gemini large models in the AI era. As a billboard and showcase, Pixel doesn't need to sell tens of millions of units.

Roughly 9 million annual shipments barely register as a rounding error for a company with over $400 billion in annual revenue. But if those 9 million phones can demonstrate Android's best experience, encourage Samsung, Xiaomi, OPPO, and vivo to follow Google's technological path, and keep Google Search as the default engine on 3 billion Android devices globally, the investment becomes entirely worthwhile.

Pixel doesn't need to be a profit center. Its mission is to protect profit centers.

The Fate of Ecological Niche

If accounting logic explains why Google doesn't want to grow its phone business, the fate of its ecological niche explains why it can't.

The true foundation of the Android empire isn't Pixel but allies like Samsung, Xiaomi, OPPO, vivo, and Honor. In 2025, Samsung shipped about 240 million phones globally, Xiaomi about 164 million, while vivo and OPPO maintained shipments around 100 million each.

These allies annually contribute hundreds of millions of Android device shipments, serving as the largest traffic carriers for Google Play, Google Search, YouTube, and Google Maps. They're also the biggest indirect contributors to Google's advertising revenue. Every Samsung Galaxy phone has Google as its default search engine, every Xiaomi phone's browser homepage is Google, and every vivo phone's app store distributes Google's suite of apps.

These allies are Google's true financial backers. This creates a classic dilemma of being both referee and player. Google develops and sets rules for the Android system (referee role) while also competing in the phone market with its Pixel brand (player role). If Pixel becomes too successful and captures market share from allies, they'll feel existentially threatened. History has repeatedly proven this.

Around 2012, Samsung was Android's largest phone manufacturer, with global market share nearing 30%. But the deeper Samsung relied on Google, the stronger its sense of insecurity became.

Around 2013, Samsung began aggressively promoting its self-developed Tizen OS, deploying it on smartwatches and some low-end phones to build its own ecological moat. Although Tizen ultimately failed due to a lackluster app ecosystem, Samsung's intent to defect sent shivers down Google's spine. A more recent example is Huawei. After U.S. sanctions cut off Huawei's access to Google GMS services in 2019, Huawei was forced to launch its HarmonyOS.

By 2025, HarmonyOS had over several hundred million installations in China, becoming the world's third-largest mobile OS. Huawei's forced departure precisely demonstrates that Android allies will without hesitation to build their own ecosystems when feeling threatened. With these precedents, Google's Pixel strategy becomes crystal clear: it must hold back.

This restraint manifests in multiple ways. At the channel level, Pixel has never pursued large-scale offline distribution like Samsung or Xiaomi. Pixel sales primarily occur through the Google Store online mall and select carrier partnerships, never establishing a retail network as deep as OPPO's or vivo's into county-level markets. In mainland China, Pixel has never officially launched.

At the pricing level, Pixel maintains a certain distance from Samsung's Galaxy S series and iPhones, neither deliberately engaging in price wars for the mid-to-low-end market nor launching ultra-premium Ultra models like Apple to provoke allies. At the hardware specification level, Pixel never pursues extremes.

While Samsung uses 200MP cameras, Xiaomi uses 200W fast charging, and OPPO uses satellite communication, Pixel continues with relatively conservative hardware configurations. The Pixel 10 series' Tensor G5 chip uses 3nm process technology, but its performance benchmarks consistently lag behind same period (contemporary) Snapdragon 8 Gen 4 and Apple A18 Pro chips.

This hardware restraint stems less from technical limitations than from deliberate ecological niche management. A product director at a domestic phone manufacturer made a telling remark in an interview: 'Our internal attitude toward Pixel has always been nuanced. On one hand, we reference Pixel's software and AI innovations—like computational photography, AI object removal, and real-time translation—and follow suit when they introduce features. On the other hand, we're secretly relieved Pixel doesn't sell well, because if Google got serious about phones, its AI and software accumulations would pose an even greater threat than Apple.'

But Google dares not go all-in, because if it did, we'd go all-in too. Pixel's 'Others' status represents a safety boundary Google actively draws. It only aims to be a benchmark, not a dominant player. It only builds showcases, not mass-market outlets.

It needs to be good enough for allies to follow Google's technological path and for consumers to perceive Android as comparable to iOS. But it must never become so good that it threatens allies or makes consumers prefer Pixel over Samsung.

If Pixel ever tries to dominate, the Android ecosystem will fracture. Samsung will accelerate Exynos chip development and self-owned services, Xiaomi will increase Penguin OS investments, and OPPO and vivo will deepen their embrace of MediaTek and self-developed chips. The Android camp would transform from a unified empire into a warlord-era chaos. This represents Google's worst-case scenario.

Because a fragmented Android ecosystem would shake Google Search's default engine status, dismantle Google Play's revenue-sharing model, and erode the entire advertising taxation business foundation.

Thus, Pixel must remain in 'Others.' This isn't failure; it's the price Google must pay to maintain a unified ecosystem across 3 billion Android devices.

The Curse of Genetic Makeup

If strategic choices and ecological niche management explain why Google won't grow Pixel, organizational genetic conflicts explain why Google couldn't succeed even if it tried. Google is fundamentally a software company.

Its cultural DNA is writing code, running A/B tests, and releasing grayscale versions in the air-conditioned offices of Mountain View, Silicon Valley. The rule for Internet companies is to move fast in small steps, iterate through trial and error. It's okay for products to have bugs; just fix them with an OTA patch.

Users have grown accustomed to the imperfections of software products and the continuous experience improvements brought by updates. But the rule for hardware is zero tolerance. Once a smartphone leaves the factory, its physical form is permanently fixed.

Color accuracy of the screen, signal strength of the antenna, thermal conductivity efficiency of the cooling module, and the chemical degradation curve of the battery—these physical characteristics cannot be fundamentally changed through software updates. Hardware requires getting it right the first time; it must be finished upon leaving the factory.

A problem in any link means millions of recalls and billions in brand damage. Apple's success in hardware stems from Tim Cook's background in supply chain management; Apple's internal reverence for hardware is deeply ingrained.

Apple can deploy thousands of engineers to suppliers to monitor yield rates, customize dedicated machine tools for a single screw, or redesign an entire production line to make the screen bezel 0.1mm narrower. Apple's control over its supply chain was built over two decades and tens of billions of dollars in investment. Google simply lacks this DNA. The most telling example of this genetic clash is Google's self-developed Tensor chip.

In 2021, Google announced it would abandon Qualcomm's Snapdragon platform and start using its self-developed Tensor chip, deeply customized based on Samsung's Exynos architecture. Google's intentions were good. By developing its own chip, Google could optimize the underlying architecture for AI inference and computational photography, fully unlocking the hardware potential of Pixel's software capabilities. But reality was harsh.

From the first-gen Tensor to Tensor G3 and G4, Pixel phones have suffered from three persistent hardware issues: overheating, connectivity drops, and poor signal strength. The first-gen Tensor's Samsung 5nm process suffered from severe leakage; phone temperatures soared when running large games or recording long videos, forcing the system to frequently throttle performance, greatly degrading the user experience. In terms of modem chips, the Tensor series long relied on Samsung Exynos modems, whose signal stability was far inferior to Qualcomm's solutions, leading to frequent disconnections in weak-signal environments like elevators and subways.

By the 2025 Pixel 10 series, the Tensor G5 finally switched to TSMC's 3nm process, significantly improving heat and power consumption issues. But in terms of modem and RF performance, Pixel still lagged behind same period (same-period) iPhones and Android flagships.

A senior communications engineer noted in an interview that modems cannot be solved by algorithms alone; they require extensive RF tuning experience, antenna design accumulation, and joint testing with carriers. Qualcomm and MediaTek have invested two decades in this; for Google to catch up in three to five years is unrealistic.

In early 2026, the Pixel series suffered a series of severe software incidents. A system update caused some phones to brick with infinite reboots, another update led to abnormal power drain (52% in 8 hours of standby), and there were widespread eSIM disconnection failures. Although these issues were fixed with subsequent OTA patches, the damage to brand reputation had already been done. A former Google Pixel software engineer revealed the root cause in an interview.

Within Google, the software team holds far more power than the hardware team. During product definition, the software team often proposes demands that are difficult to achieve with existing hardware, forcing the hardware team to adapt reluctantly.

When hardware issues arise, the software team's solution is always to push a patch first. This software-first culture is an advantage for pure software products but a disaster for integrated hardware-software products like smartphones.

Compared to Apple, Google's bargaining power with suppliers is vastly inferior. Apple ships over 200 million iPhones annually, making it the largest customer for core component suppliers like TSMC, Samsung Display, and Sony sensors.

A single order from Apple can determine a supplier's annual revenue trajectory. This scale gives Apple absolute control over its supply chain, even demanding suppliers customize dedicated production equipment and inspection instruments. In contrast, Pixel ships fewer than 10 million units annually, giving it extremely limited bargaining power with suppliers. According to a mobile supply chain source, Google often cannot secure the best batches when procuring core components.

For screen panels, memory chips, and camera modules, suppliers prioritize fulfilling large orders from Apple and Samsung, allocating remaining capacity to Google. In terms of quality control standards, Google lacks Apple's ability to have on-site engineers deeply involved in the production process. Google's QC relies more on supplier self-inspections and spot checks, whereas Apple maintains full-time on-site presence and control throughout production. This is why Pixel hardware always falls short in the details.

It's not that Google doesn't know what good hardware is; it simply lacks the scale and bargaining power to demand suppliers meet its standards. Silicon Valley elites are accustomed to writing code in air-conditioned rooms but unwilling to oversee yield rates in factory workshops.

This lack of reverence for stability and quality control is a common ailment among software giants venturing into hardware. Microsoft failed with phones, Amazon failed with phones, and Meta failed with phones.

Google's Pixel persists, but its hardware performance remains unable to escape this genetic curse.

The Endgame of the AI Era

The Pixel 11 series, set to launch in August 2026, represents Google's critical bet in the AI era. From currently leaked information, Pixel 11 still offers incremental hardware updates.

The processor upgrades to TSMC's 2nm Tensor G6, base storage increases from 128GB to 256GB, and the design continue (carries over) the previous generation's style. The biggest hardware change is a new LED light strip called Pixel Glow on the back of Pro and Pro Fold models, which emits different colors and rhythms in sync with AI interactions. But Pixel 11's true killer feature lies not in hardware but in AI.

Google is deeply embedding Gemini large model capabilities into the Android system's core. Pixel 11 will be the first phone to fully integrate on-device Gemini Nano 3.0, supporting completely offline real-time translation, smart summarization, image generation, and voice assistant.

Google aims to make Pixel 11 a phone that truly understands user intent, not just a tool that executes commands.

This strategy's logic is clear: Google attempts to use AI's intelligence to mask hardware shortcomings. You don't need Pixel 11 to have the fastest charging, best screen, or strongest cooling. You just need it to offer the smartest AI experience.

When a user says, "Help me summarize the meeting content into an email and send it to CEO Zhang," Pixel 11 can automatically complete speech recognition, content summarization, email composition, and sending—a full workflow whose impact far outweighs numerical differences in benchmark scores. More critically, Google doesn't need Pixel 11 to sell in huge volumes.

It needs Pixel 11's AI experience to be stunning enough that executives from Samsung, Xiaomi, OPPO, and vivo hold emergency meetings after the launch to discuss follow-up strategies. This is the ultimate form of the showroom strategy in the AI era. Over the past decade, Google has successfully promoted multiple technological innovations to allies through the Pixel showroom. Computational photography, night mode, real-time translation, screen calling, and AI erasure all debuted on Pixel before being adopted by Samsung and Chinese vendors.

Each adoption elevated the overall Android ecosystem experience and expanded Google's AI services to more devices. In the AI era, this model becomes even more critical. Since 2025, major smartphone vendors have launched their own on-device large models and AI operating systems. Samsung introduced Galaxy AI, Xiaomi launched Super Xiaoyi, OPPO debuted Andes Large Model, and vivo rolled out Blue Heart Large Model.

These vendors are increasing their self-developed AI investments, reducing reliance on Google's native AI services. If Google cannot demonstrate AI experiences far superior to its allies on Pixel, these allies will accelerate their departure from Google's AI ecosystem to build their own moats. By then, the Android camp will no longer be a unified empire centered on Google but a collection of fragmented AI warlords.

Pixel 11's success hinges not on how many units it sells but on whether it can re-establish Google's benchmark status in AI experience. If Pixel 11 succeeds in AI experience, even if it remains in the "Others" category, Google wins.

Because allies will follow suit, 3 billion Android devices will carry Google's AI services, and the ad-tax business model will continue. If Pixel 11's AI experience fails due to hardware shortcomings—such as on-device model stuttering, overheating throttling during prolonged use, or battery life unable to sustain AI computation power consumption—the showroom loses all persuasive power.

Allies will more resolutely pursue self-developed routes, and the fragmentation of the Android camp will become irreversible. Current signs indicate that allies have mixed feelings about Google's showroom strategy.

On one hand, they actively follow Pixel's AI innovation directions. Samsung's Galaxy AI saw major upgrades in 2025, with many interaction logics highly similar to Pixel's Gemini experience. Chinese vendors are also rapidly iterating on-device large model deployments.

On the other hand, they are accelerating de-Googleization at the underlying system level. Samsung aggressively promotes its Samsung Internet browser and Galaxy Store in India and Southeast Asia, reducing reliance on Chrome and Google Play.

Xiaomi's HyperOS incorporates extensive self-developed optimizations at the system level, diverging increasingly from stock Android. Huawei's HarmonyOS is now fully independent of the Android ecosystem.

A strategic analyst from a Chinese smartphone vendor put it bluntly in an interview: "We'll adopt Pixel's AI features, but we won't surrender our soul to Google. If Google's showroom works, we'll follow. If not, we'll do it ourselves. In the AI era, the core competitiveness lies in data and models—those must be kept in-house to be safe."

Epilogue:

Returning to the original question: Why has a tech giant with the world's top engineers and annual net profits exceeding $130 billion remained in the "Others" category after 16 years of smartphone making?

The answer isn't that Google is incompetent or can't build hardware. The answer is that the underlying logic of the business world doesn't allow a company to occupy all ecological niches simultaneously.

You can't be both a tax-collecting overlord and a competing overlord (hegemon). You can't enjoy software's high margins while avoiding hardware's grunt work. You can't expect allies to fight wholeheartedly while using your own products to cannibalize their market share.

Apple succeeds in smartphones because it has been a hardware company from day one. It doesn't need allies, doesn't need an ecosystem, and doesn't need to balance competing interests. It designs its own chips, controls its own system, runs its own retail stores, and captures the vast majority of industry profits.

This is a highly self-consistent closed model. Google has chosen a completely different path. It has woven a net covering 3 billion devices globally with its free Android system, then collects taxes on search ads and cloud services at every node of this net.

Maintaining this net requires full cooperation from allies like Samsung, Xiaomi, OPPO, and vivo. Pixel exists only to ensure this net doesn't develop holes, not to compete with allies for prey. In the AI era, this logic becomes even clearer.

Pixel 11 doesn't need to stage a comeback. It just needs to quietly serve as Android Empire's technology showcase and defensive moat. It must be good enough for allies to follow but small enough not to threaten them.

An annual shipment of ~9 million units, less than 1% global market share, and the "Others" label—what outsiders see as failure markers are, in Google's strategic calculus, the most comfortable and secure posture. After 16 years of smartphone making, Google has finally realized one thing: Some races aren't meant to be won—they're meant to be controlled.