The struggles that Google has been facing with its hardware division have been well documented. Last year, it exited the tablet space, canceling the successor of the poorly received Pixel Slate. The Google Pixel lineup isn't doing much better. Despite multiple attempts, the phones haven't managed to sell well. Limited distribution aside, the sales numbers of the Pixel 4 are a minor fraction of the sales of Samsung's Galaxy S series or the Apple iPhone, for example. In 2016, Google made an ambitious agreement with Verizon to exclusively sell the first-generation Pixel series in carrier stores, while simultaneously selling unlocked variants online through the Google Store. The exclusive nature of that agreement expired in 2019, but Verizon still remained the major carrier partner for Google. Now, according to Android Police's source, the Verizon-Google carrier sales agreement for the Pixel is dead.

Android Police reports that after speaking to a source familiar with Verizon's plans, the carrier has apparently put on indefinite hold plans to sell new Google Pixel phones. The reason for putting such plans on hold wasn't provided, but Android Police guesses that it's because the phones "just don't sell."

This is a big blow to Google's ambitions of entering the hardware smartphone market and positioning the Pixel phones as an alternative of Apple and Samsung, especially in the U.S. Back in 2014, Google launched the Motorola Nexus 6 on all four major carriers in the U.S, but then reversed course the following year by selling the Huawei Nexus 6P exclusively online. The 2016 Verizon-Google exclusivity agreement for the Pixels had been made for three years at that time, and was highly hyped up by Google as a proper attempt to enter the U.S. smartphone market, which is largely dominated by a carrier sales mechanism. However, it hasn't panned out in terms of sales. The Pixel 3 series sold poorly. While the Pixel 3a was a relative success for Google, the Pixel 4 arrested the momentum by largely failing to distinguish itself against its competitors. This was despite the fact that it was being sold by all four major carriers in the U.S, making it the the first time for a Google branded phone since the Nexus 6.

Android Police's source believes the chances of the upcoming Google Pixel 4a coming to Verizon are now zero, as it's far too late for Verizon to change its mind. With respect to the next-generation Google Pixel 5, there is a chance that it could end up there, only because there is still enough time left before its launch for plans to change. As of now, though, Verizon allegedly has no intention of selling Google's next-generation phone.

The report notes that even the better sales of the Pixel 3a remain meager in the larger U.S. smartphone market. (That market remains a duopoly as Apple and Samsung are the only big players that matter, while Huawei has been locked out, and other Chinese vendors such as OPPO and Xiaomi haven't entered the market.) Verizon was Google's most important carrier partner as it was responsible for the biggest share of carrier advertising and promotion for every Pixel phone generation up until now.

As noted by Android Police, carriers are how phone manufacturers sell their phones in the country, so Verizon's importance can't be overstated. The company was apparently so unhappy with the Pixel's sales performance that it ended the deal. The upcoming OnePlus 8 will launch on its mmWave 5G UWB network, so it's clear that it thinks OnePlus will do a better job than Google in terms of sales.

Where does this leave Google's hardware division? It's a low point, to be sure. The cancellation of Verizon's partnership would represent a failure for Google's four-year effort to challenge Apple and Samsung in the premium smartphone market. Google may have to change its strategy here. Android Police notes that it currently has no reason to think that the idea of Google eventually exiting the smartphone market is on the table, but it may be that Google executives will have to consider it. The Pixel 5 could still end up on Verizon, but the chances are now remote. The publication has reached out to Google for comment on the news.

While this news is surprising on one level, it's hard to say that we didn't see it coming. The Pixel phones, despite their well-regarded strengths in aspects such as camera performance, have made far too many compromises to be regarded as genuine top-tier flagships. They are also available only in 12 countries around the world, which is a basic distribution mistake. Google may end up shifting gears like it has done previously, or alternatively, it could choose to double down its efforts even in the face of defeat.

Source: Android Police

Update 1: Verizon's response

Verizon has issued a response to this story, denying any truth to it. Speaking to Android Authority's Eric Zeman, Verizon said: "there is no truth to this report." They go on to say "Verizon continues to work with Google and looks forward to the new portfolio of devices." Of course, this wouldn't be the first time a company denied something that would eventually happen. We'll be keeping a close eye on this story.

Update 2: Report retracted

Well, this doesn't happen often. Android Police has issued a full retraction of their report that Verizon would not sell the Pixel 4a and Pixel 5. David Ruddock writes: "the previously reliable source from which we received it [the information]—a source that we know and trust, and provided information from a variety of contexts and sources—was incorrect." Ruddock can't go into detail, but he says they have "extremely good reason" to believe the source had inaccurate information. At this time, it appears Verizon's response is the conclusion to the story.

Source: Android Police