Google launched two new additions of Pixel 3 family – 3A and 3A XL at Google I/O 2019 today. 3G and 3A XL are budget friendly affordable phones, with estimated wholesale price of US$300 range. Both models are downgraded to Snapdragon 670 processor, 4GB RAM and 64GB ROM, taking off wireless charging etc. However, Google maintained the camera features as same as higher-priced Pixel 3 models, by emphasizing low light / night mode, as well as portrait mode. Pixel 3A comes with a 5.6 inch OLED display, while 3A XL is upgraded to 6.0 inch display. Interestingly both models bring back 3.5mm headset jack. Battery life has improved from previous models as well.

In addition to Verizon, Google is bringing 3A and 3A XL to T-Mobile, Sprint, US Cellular and other carriers in 16 countries / markets (UK, Germany, India, Japan, Australia etc.) starting from today. We view this as a wise / meaningful step because the limited distribution channel in US (exclusive deal with Verizon) and other major markets remained one of major bottlenecks for Google Pixel phones recent years. We tracker Google only took less than 1% market share in global smartphone market during Q1 2019.

Google is penetrating down to US$300 band will certainly extend the addressable markets for Pixel phones. We forecast US$300-399 band will see a healthy and decent growth rate in 2019, while overall smartphone market will maintain downturn track this year. Huawei, OPPO and vivo are top 3 players in US$300-399 band. We tracked the three vendors combined made up 73% volume share in this band in 2018. While the presence of the three Chinese brands remains nascent in the US market, we expect Pixel 3A models will encounter the competition from Huawei and others in European markets.