Such hi-tech gadgets are central to Google's strategy to draw consumers with its own-branded hardware and thereby integrate them ever-closer with the company's better-known search engine and artificial intelligence-driven software. ''The two [Pixel 4] smartphones are already proceeding into mass production and will be ready to ship after Google's [new products] unveiling next week,'' one of a few sources close to the situation said. ''Google is also working on a version with 5G technology, which is in test production.''

 

A marketing splashing generated by Google's step into 5G smartphones, which would be the first by a U.S. company, presents a direct challenge to Apple and a few other leading hardware and handset makers just like Samsung Electronics and Huawei Technologies. It may also throw down the gauntlet at Microsoft, Google's biggest U.S. rival in search and software, which proclaimed a return last week to the tremendously competitive smartphone market with its own folding model, after it exited in 2016.

 

Google has made no trick of its aim to move into hardware although the apparent acceleration of its investment plans, joined with the company's deep pockets, will raise the pressure on competitors. Alphabet, Google's parent, has around $117 billion in cash, while Apple has $102 billion.

 

''Bringing together software and hardware ... does have a lot of synergistic value ... and the main way to do that today for our core [search and software] products is by using hardware,'' Google CEO Sundar Pichai, told analysts in a February conference call. ''As we scale up our hardware efforts ... you can definitely glimpse the future.'' As a relative newcomer to the global smartphone market, Google's Pixel phone series nevertheless has less than a 0.5% market share. Nonetheless that is flourishing exponentially. This year the company strives ship as many as 10 million phones, sources said, more than twice last year's level.

 

''Although Google's smartphone shipments are still small, it's one of the clients that still has healthy volume growth,'' another source said. ''It offers better prices for suppliers too.'' Google's 5G model is currently being test produced in China. But to escape U.S. tariffs from the China trade dispute, and to source cheaper labor, all Google production meant for the U.S. will eventually be made outside China. A leading option is a Vietnamese facility due to be ready by the end to the year, as the Nikkei Asian Review first reported.

 

Google may eventually make a decision to release its new 5G model in spring next year, the sources said, together with the release of a budget Pixel phone. But that release date would still put Google prior to Apple in the race to produce the next generation of 5G phones. The Google 5G handset will include a Snapdragon 855 mobile platform, made by U.S. chipmaker Qualcomm, the sources added. For now the new flagship Pixel 4 series will sport advanced organic light-emitting diode screens, like Apple's premium iPhone 11 Pro and 11 Pro Max models launched in September.

 

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