Alphabet
’s
GOOGL
division Google is expanding its hardware business on the back of its advanced device launches.
At its I/O developer conference, the company ended the quest for its long-awaited smartwatch by introducing Google Pixel Watch, which runs on Wear OS software and is powered by Fitbit’s technology.
It unveiled the latest smartphone, Pixel 6A, which is powered by a Google Tensor chip and features an all-day battery that can last up to 72 hours in case of extreme battery-saver mode. The phone will be released this summer.
The company teased about its Pixel 7 smartphone, which is coming this fall. It also teased about the Pixel 7 Pro flagship phone and a new Android tablet, which will be launched next year.
Google also unveiled Pixel Buds Pro earbuds, which feature beamforming mics, and supports active noise cancellation and spatial audio. The new earbuds will be available in July 2022.
The latest device launches have aided the company to enhance its product offerings and broaden its portfolio.
Growth Prospects
We believe that the latest move will help Google rapidly penetrate the booming smartphone, smartwatch and earbuds market.
According to a report by Persistence Market Research, the global smartphone market is expected to reach $982.8 billion by 2031, seeing a CAGR of 6.8% between 2021 and 2031.
Per a report from Facts and Factors, revenues in the global smartwatch market are expected to hit $97.5 billion by 2028, witnessing a CAGR of 21.5% between 2022 and 2028.
Per a report from Mordor Intelligence, the global earbuds market is likely to see a CAGR of 20% between 2021 and 2026.
Cut-Throat Competition With Apple
With the latest move, Google ups its device game against
Apple
AAPL
, which continues to ride on its robust devices portfolio.
Apple’s flagship device iPhone, which accounted for 52.5% of the total revenues in fiscal 2021, remains its key catalyst.
The company is continuously gaining strong traction among customers on the back of its iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max, which were introduced last year at its virtual product launch event.
In March 2022, the company unveiled its most affordable device — iPhone SE, which is powered by A15 Bionic, and features 5G, longer battery life and improved durability.
It also introduced the iPad Air, powered by the M1 chip.
In addition to these, Apple is riding on its non-iPhone devices like Apple Watch and AirPod, which enjoy solid customer momentum.
Nevertheless, Google’s latest Pixel phones are likely to give strong competition to Apple on the back of the advanced features and popularity of Android OS.
The new Pixel Watch offers features similar to the Apple Watch, such as tap-to-pay, finding directions in Google Maps and receiving notifications, and controlling by voice commands using Google Assistant.
Hence, Pixel Watch is expected to give competition to Apple Watch.
Also, active noise cancellation and spatial audio features in Pixel Buds Pro make it a clear competitor of AirPods.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider some better-ranked stocks like
Avnet
AVT
and
Monolithic Power Systems
MPWR
. Both companies sport a Zacks Rank #1 (Strong Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Avnet has gained 12.6% in the past year. The long-term earnings growth rate for AVT is currently projected at 37.2%.
Monolithic Power Systems has gained 34.9% in the past year. The long-term earnings growth rate for MPWR is currently projected at 25%.
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