Google's Pixel 3 Could Be a Success if More Carriers Sell It

From the looks of things, Alphabet/Google's (GOOGL) next-gen Pixel devices are unlikely to one-up Apple (AAPL) and Samsung's flagship phones when it comes to hardware.

On the other hand, Google's Pixel 3 and 3 XL should, like the Pixel 2 and 2 XL before them, be differentiated when it comes to software. And if Google, which reportedly plans to unveil its newest Pixels on October 9th, also lines up a larger set of carrier partners this time around, that should allow Pixel sales to grow a little more within a flatlining smartphone market.

Much like the Pixel 2 and 2 XL, the Pixel 3 and 3 XL are expected to have virtually identical features outside of their display and battery sizes. Photo leaks indicate the devices will feature iPhone X-like top notches, and (like Apple and Samsung's flagships, but unlike prior Pixels) feature glass backs rather than aluminum ones.

Glass backs make it easier to support wireless charging, a feature that (judging by a leaked video) Google will be supporting this time around. In addition, the third-gen Pixels will reportedly ship with a pair of wired headphones that feature a button for launching Google Assistant. As usual, Google's phones will be powered by a flagship Qualcomm (QCOM) processor (in this case, the Snapdragon 845).

Notably, though the Pixel 3 and 3 XL will reportedly have dual front cameras that are said to enable a "Super Selfie" feature, they're expected to have just a single rear camera. In that respect, the phones are quite the outlier at a time when dual rear cameras have become the norm for high-end phones, and some OEMs have even begun launching phones with three rear cameras.

To be fair, with the help of machine learning algorithms and proprietary image-processing chip known as the Visual Core, Google did a very good job with the Pixel 2's sole rear camera, as reviews make clear. And some sample photos claimed to be taken by a Pixel 3 XL suggest that little will be changing on that front this year. Nonetheless, by not having a second rear camera, Google is unable to do things such as dedicate a camera to wide-angle shots or support optical zoom.

The Pixel 3 also reportedly comes up a little short in some other hardware areas. Google is once more expected to use LG's OLED panels for its displays rather than Samsung's, which are used by both Apple and Samsung's flagship phones are generally considered best-in-class. Photo leaks indicate the phone's top notch is larger than the iPhone X's, and that it also has a sizable bottom bezel. And whereas Samsung put a giant 4,000mAh battery inside the Galaxy Note 9, the Pixel 3 XL reportedly features a 3,430mAh battery, which would be slightly smaller than the Pixel 2 XL's.

But these hardware limitations might not necessarily be deal-breakers for Pixel fans who have come to love its software feature set. This feature set includes a streamlined user interface that contrasts with the more bloated UIs on some rival Android phones, quick access to Android updates and a superb camera app.

It's also worth keeping in mind that to date, Pixel sales have been hampered by a pretty limited set of distribution partners in the U.S. and elsewhere. Though the Pixel 2 and 2 XL work on the networks of all of the top-4 U.S. carriers, only Verizon (VZ) sells the phones through its physical and online stores. In the U.K., EE is the only carrier to do so.

With Samsung having made fairly incremental updates to its Galaxy S and Note lines this year, just adding a few more large carrier partners could be enough for the Pixel 3 and 3 XL to meaningfully outsell their predecessors. Even if an unspectacular hardware feature set and a sluggish high-end smartphone market prevents the phones from seeing blockbuster sales.

Alphabet and Apple are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells GOOGL or AAPL? Learn more now.

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