Morgan Stanley thinks the Pixel Smartphone will generate Google almost $4 billion in revenue next year

Morgan Stanley thinks the Pixel Smartphone will generate Google almost $4 billion in revenue next year

Morgan Stanley has probable that Google’s new Smartphone, the Pixel, will produce $3.8 billion in revenue for the company in 2017.

The estimate is based on the possibility that Google will sell around 5-6 million Pixels next year, which retail between $649 and $869.

The bank also expected that Google will sell 3 million Pixels in the last three months of 2016, generating $2 billion.

For a association point, Apple sold 212 million iPhone in the 2016 financial year, generating the company $13-7 billion in revenue.

 

Morgan Stanley Pixel estimates

In the last sector of 2016, Apple sold 45.5 million iPhone, generating $28.2 billion in revenue. The Morgan Stanley note also estimates the Pixel will be half as beneficial for Google as the iPhone is to Apple, thanks to the former device’s  higher cost of materials.

The Pixel phone will generate a 22% to 25% gross profit margin, the note says, varying according to the model. The Google pixel is almost half as profitable as the iPhone’s 41% margin, according to estimate from Morgan Stanley.

But Google will profit from the Pixel beyond sales of the phone itself ; the note says, through what Morgan Stanley’s analysts refer to as  “Android user monetization”.

People spend three times more money on Ios shopping apps than they do Android ones, but some of the Pixel’s features will help close this gap, according to the bank’s analysts.

Features unique to the Pixel, such as the Google Assistant, the Pixel camera, and Daydream will ultimately lead to users spending more money on Android, according to the research note.

Morgan Stanley’s analysts also calculate that these features could see the Pixel driving higher mobile search monetization for Google as advertisers will spend more to reach the consumers who spend the most on their mobiles.

 

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