Google has started test production of a 5G flagship smartphone aimed at the US market, according to Nikkei. Anonymous sources told Nikkei that the smartphone would either be unveiled alongside the Pixel 4 and Pixel XL flagship smartphones next week, or in the spring of 2020 alongside the launch of a budget version of the Pixel 4.
The former option seems unlikely, though, given that the unveiling event is days away: Google has historically sold Pixel devices just a few days after unveiling events, so the Pixel 4 and Pixel XL are likely already in production.
Google can build momentum in the declining premium smartphone segment by adding 5G. A Pixel 4 or Pixel XL device would compete in the premium smartphone market, a shrinking segment within a shrinking global smartphone market. High-end smartphone sales have declined because consumers are waiting longer to upgrade between device cycles. But they may be willing to upgrade at a faster rate for devices with 5G, and at a premium. Early adopters — those wanting 5G service as quickly as possible — reported a willingness to pay a 32% premium for 5G, according to Ericsson.
Google could potentially boost sales of the 5G device by partnering with more US wireless carriers. T-Mobile added support for the Pixel lineup in May 2019, but prior to that, the devices were exclusive to Verizon. Early in a product launch, an exclusive partnership can boost device sales, as the network provider partner has incentive to market the device to its customers.
Roughly 90% of people buy smartphones directly from carriers, according to CNet. Samsung and Apple have moved away from exclusive partnerships with carriers because they can sell more devices by selling through all major carriers. For a 5G device in particular, because networks are in the rollout phase and therefore limited in scope, Google will need to forge relationships with more carriers to increase the size of its viable target audience.
Ultimately, however, the value of 5G devices will be stymied by short-term network availability. 5G networks are still in their infancy, and coverage is still inhibited by such issues as limited indoor coverage. Early reviews of Samsung's Galaxy Note 10+ 5G, which retails in the US for $1,399, detail the promise of 5G speeds, but also the frustration from lack of network availability and continuity. Google will need to emphasize the forward-looking value of including 5G on a device that will likely come with a hefty price tag. This may be a hard sell for consumers, who are increasingly turning to midrange devices that offer many of the same features at a lower cost.