The Pixel phone is worth $3.8 billion to Google next year, Morgan Stanley says

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While Google's new Pixel phone isn't anywhere near the iPhone, a Morgan Stanley analyst sees it adding $3.8 billion in revenue to Alphabet's coffers in 2017.

"Bigger picture, we believe the Pixel is important as [Alphabet] works to provide users a more integrated and consistent Android experience aimed to improve Android user mobile search monetization," analyst Brian Nowak wrote in a research note.

Pixel, Google's first phone with a completely in-house design, is one of several factors setting the company up for a "great" 2017, Nowak wrote. In addition to selling 3 million Pixel phones in the fourth quarter of this year and 5.5 million in 2017, Google's core websites are growing faster than expected, Nowak estimates.

Pixel, Google's expanded text ads, a fourth mobile ad unit and Maps should add $6.5 billion combined to Google's total revenue in 2017, Nowak estimated. CNBC has reached out to Google for comment.

Still, while the Pixel seems poised to improve shopping and advertising on Android, a few million phones hardly compared to the 78 million iPhones Wall Street expects Apple to sell during the December quarter, according to FactSet. Plus, Alphabet CFO Ruth Porat told investors in an earnings call that holiday sales and marketing for its new hardware would add to costs going into 2017.