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Alphabet Is About to Launch New Google Pixel Smartphones

By Daniel Sparks – Updated Aug 29, 2018 at 2:56PM

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Alphabet is readying its next big bet on the smartphone market.

Apple's (AAPL -1.39%) rumored upcoming iPhones have been getting all of the attention in the press recently. With a product launch event that usually takes place around the second week of September, the anticipated unveiling is likely is probably only a few weeks away -- and the ever-active Apple rumor mill suggests the closely watched event is on schedule. 

However, the iPhone isn't the only hot new smartphone to look forward to this fall. One smartphone product line that has been gaining traction in recent years is Alphabet's (GOOGL -1.84%) (GOOG -1.83%) Google Pixel lineup. With Google launching new versions of its Pixel smartphones for the past two years, the rumored Pixel 3 and the Pixel 3 XL smartphones are widely expected to be released in October.

The back of a Google Pixel 2 smartphone

Google Pixel 2. Image source: Google.

What to expect

Thanks to what appear to be numerous leaks of the Pixel 3 XL, there's actually already quite a bit of information about the larger version of Google's expected smartphone lineup. Among the many purported leaks, tidbits include an iPhone X-like notch, USB-C earbuds, a massive 6.7-inch display, a 3,430 mAh battery, a 12.2MP rear camera, a Snapdragon 845 processor, 4GB of RAM, and 64GB of storage. 

For Alphabet's rumored smaller version of the Pixel 3, the company seems to have been able to prevent major leaks. But the rumor mill seems to agree that the smaller version won't feature the Pixel 3 XL's iPhone X-like notch.

Alphabet's growing hardware business

While Alphabet's smartphone sales are still in the minority, with an estimated 3.9 million units shipped in 2017 according to IDC, Pixel devices are playing a key role in the rapid growth of Alphabet's hardware business.

In Alphabet's most recent quarter, the company's fast-growing hardware sales were one of three key drivers for the search giant's 37% year-over-year growth in its "Google other" segment. The other two drivers for the segment were cloud and app store sales. Alphabet CFO Ruth Porat noted in the company's most recent earnings call that the company's hardware business "continues to deliver significant growth."

Of course, Alphabet's hardware efforts still pale in comparison with Apple's. For instance, Alphabet's total Google other revenue, which includes revenue from hardware, cloud and the app store, was $4.4 billion in Q2. During the same three months, Apple's iPhone revenue came in at $29.9 billion.

But with a Pixel 3 lineup on the horizon -- and considering the rapid growth of Alphabet's hardware business -- the company's bet on hardware will likely only increase. Over the long haul, the lineup could even morph into meaningful iPhone competition.

Bloomberg's well-connected Mark Gurman and Debby Wu say their sources expect Alphabet to unveil new Pixel devices at an event on Oct. 9.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A and C shares) and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

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