People aren't buying smartphones like they used to, primarily because they've gotten so expensive that consumers are hanging on to them for three or four years.
Apple's iPhone sales have plateaued. IDC said 2018 was the worst year ever for smartphone shipments. Alphabet-owned Google knows this too. In its most recent earnings it said Pixel sales, included in its "other category of revenues" were falling.
"Hardware results reflect lower year-on-year sales of Pixel, reflecting, in part, heavy promotional activity industry wide, given some of the recent pressures in the premium smartphone market," Alphabet CFO Ruth Porat said during the most recent earnings call. The Pixel 3 might not have sold well because it's exclusive to Verizon (unless you buy it unlocked), and it's expensive, starting at $799. That leaves far too many people out of the market right from the start.
So, instead of building a phone with more bells and whistles, Google is stripping out a lot of the expensive stuff and building a phone called the Pixel 3a that starts at $399. And, instead of being exclusive to Verizon, Google's Pixel phones are launching on T-Mobile, Sprint, Verizon, and U.S. Cellular for the first time.
"The market has slowed down. People are holding on to devices longer," Mario Queiroz, the head of Pixel and vice president of product management at Google, told CNBC in an interview. "They are good but also expensive. That's not a good thing for consumers and the industry. So, we made a decision to develop a product from ground up to be a premium smartphone experience at an accessible price point."
Lots of companies are tying to sell new phones at lower prices, too. Apple's iPhone XR starts at $799, and Samsung's Galaxy S10e starts at $749. But Google is going even lower with the $399 Pixel 3a and larger $479 Pixel 3a XL. And it's trying to do so without sacrificing the things people rely on a phone for: Good software and a great camera.
I've been testing the Google Pixel 3a XL for the last week or so. Here's what you need to know about it.
The Pixel 3a looks similar to the more expensive and more powerful Pixel 3 that launched in November, so most people won't even know you're holding a handset that costs a few hundred bucks less. It does feel cheaper, though, with a plastic body instead of glass. But I do love the neon green power button that gives the white body a little pop.
Most people tell me the camera is the most important part of their phone, and Google seems to know that too. It kept great cameras on the Pixel 3a. It cut some stuff, like a front-facing depth sensor for better portrait mode shots, but I found it was still very good. And the back camera was also impressive in my tests, featuring some of Google's behind-the-scenes software tweaks to improve clarity in zoom and in portrait mode. Plus, portrait mode works on anything, not just people, unlike the camera on the $799 iPhone XR. A night mode, which made its debut on the original Pixel 3, brightens scenes so much that dark shots almost look like they were snapped in the day.
Google keeps its Android team separate from the Pixel team, Queiroz said, so the group is basically competing on the same level as any other phone maker. To stand out, Queiroz said he wants Pixels to offer the best Google software experience you can get. And I found that to be true. Despite a slower Qualcomm processor than what you'd find in the Pixel 3, the Pixel 3a XL is still quick compared with experiences from Samsung or Huawei, which can feel bogged down with features.
You get things such as Google call screening, which allows the voice assistant to answer a call for you and speak to an unknown caller to see if the call is just spam or not. It's a feature I love to use, and allowed me to ignore pretty much every number I didn't know. Google will continue to launch exclusive experiences like this for its Pixel phones in the coming months.
Google avoided cutting corners in areas that matter most. There's a headphone jack, which the Pixel 3 doesn't even have, but Google doesn't include headphones in the box. The phone has stereo speakers that sound good, if not a little foggy at higher volumes, which is a feature you don't normally get at this price point. The OLED screen is sharp and bright even in sunlight. There's a fingerprint reader on the back that's nice and fast.
Also the battery life was really good. I charged the phone every night and never ran out of battery during the day, and light users might be able to use it into a second day. But, I think most people only need a phone that gets them until bedtime, and this does that.
The point here is that Google focused on what matters: Clean, fast software, good battery life and solid camera. Sure, you can get better ones at higher price points, but you'd be hard pressed to find this balance in another phone that costs $399.
Google had to cut costs down in a few areas, and some of them are disappointing. The Pixel 3a and Pixel 3a XL are resistant to splashes of water but aren't as water resistant as the Pixel 3 and Pixel 3 XL are, so you can't drop them in the pool.
Also, the Pixel 3a phones don't support wireless charging, like many other phones do. I love wireless charging and keep a charging pad both on my desk and by my bedside, so it was kind of a bummer to plug the Pixel 3a in. But, Google includes an 18-watt charger which juices it up really quickly. Fifteen minutes at the plug should last about 7 hours. That's a win for consumers, since iPhones still ship with a super-slow 5-watt charger and users need to pay more for a faster one.
You only get 64GB of storage with the entry-level Pixel 3a and Pixel 3a XL. Casual phone users who don't download a ton of movies or games won't need to worry about this. Google throws in free unlimited storage of photos and videos through Google Photos in the cloud, so they won't hog up space on the phone, at least.
My wife is a big fan of the Pixel family ever since she took an original Pixel I bought several years ago. She's due for an upgrade, and we're planning to pick up a Pixel 3a XL for her. The price is perfect for what you get. I don't think most people will notice the slower processor, because Google has optimized the software so well. The lack of wireless charging and water resistance are let-downs, but I don't think most people are too worried about that, and the phone can still resist an accidental splash of water.
I think Google has two winners with the Pixel 3a XL and Pixel 3a. They're priced right, they're finally available from more carriers, which means people will know more about them, and the basic features that people want are all there. And if you have a deeper wallet, buy the Samsung Galaxy S10e or the regular Pixel 3 XL.