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How many pixel phones were sold by Google worldwide in the last 12 months?

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  1. CLARIFY:
    1. Is it OK to think about direct to consumers not Pixels sold to wholesale retailers? Yes
    2. Is it OK to exclude bootleg or second hand Pixels? Yes
  2. EQUATION: I am going to start with the world population and narrow it down until we find who is most likely to purchase Pixels this year. 
    1. GENERAL POPULATION: 
      1. World Population: 7.8B 
      2. World Population - Non Pixel Markets: 
        1. Pixels are generally not popular in China or India. It's also not sold in Africa, so I will exclude these large markets. 
        2. China Population: 1.4B
        3. India Population: 1.4B
        4. Africa Population: 1.3B
        5. World Population - China - India - Africa: 7.8B - 1.4B - 1.4B - 1.3B = 3.7B 
      3. Average Lifespan: 0-80
      4. Average People in Each Age Group: 
        1. Assume even distribution of age group in each year.
        2. 3.7B people / 80 age groups = 46.25M per age group
    2. SMART PHONE AGE RANGE:
      1. Average Smart Phone Age Range: 15 - 65 (50 years)
      2. Total Average Smart Phone Age Population: 46.25M per age group * 50 age groups = 2.3B people
    3. INTERNET
      1. % Connected to Internet: ~ 60% of world (This % may be higher with the removal of Africa, India and China, but let's assume 60% for now.)
      2. Total Population Connected to Internet: 2.3B people * .6 = 1.38B
    4. SMART PHONE USE:
      1.  Assume that of the 60% of people connected to the internet, 70% use smart phones. 
      2. Total Smart Phone Users: 1.38B people * .7 = 966M
      3. Assume that people upgrade smart phone in world overall every 5 years.
      4. Total Smart Phone Users Upgrading Phone: 193.2M upgrading phone
    5. SMART PHONE UPGRADES: 
      1. 10% of smart phone users are Apple
      2. 90% of smart phone users are Android
      3. Assume that each person buying a smart phone on average is buying one phone. Some people may have two phones (business and personal) as well, but use case is likely not very high. Excluding multi-phone purchase.
      4. Android Phone Users: 193.2M * .9 = 173.9M Android upgrades
    6. GOOGLE PIXELS SOLD: 
      1. There are many Android devices, including Samsung, OnePlus, tMobile, etc. Assume Google Pixels capture 5% of market. 
      2. Google Pixels: 173.9M * .05 = 8.7M pixels
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My answer to this Google estimation interview question:

  • Number of people in the world = 7B
  • Of those how many are wealthy enough to be high-end phone users (the pixel is a high-end phone)? 
    • I estimate 10% of the world population is wealthy enough to own a high-end phone. That is 7B *0.1 = 700M
  • Of those how many are of the age to buy a phone?  
    • I estimate that 10% are too young, 10% are too old, so 80% are old enough to buy a phone: 700M * 0.8 = 560M, which I'll round to 600M
  • Of those how many are Android?
    • World wide, 80% of phone are Android. However, among high-end phones, I would estimate that it's about half that, so closer to 40% Android, so 240M 
  • Of those how many prefer Pixel?
    • Samsung dominates the Android market, so I would estimate that Google has about 10% market share of high-end Android phones. 240M X 10% = 24M
  • Of those how many are purchasing a new phone in a given year?
    • I'm assuming that the high-end phone market is already saturated. So all purchases are replacements. People purchase high-end phones approximately once every two years, so 24/2 = 12M

I estimate that Google sold 12 million new pixel phones worldwide in the last 12 months. 

Actual sales in 2019 = approx 10M (Source: ZDNet)

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The world population is ~7 billion people. Not all of those people are fortunate enough to own smart phones. I know that smart phones have a 50% market penetration in China. I will extrapolate that out to assume that out of the 7 billion people on earth, 3.5 billion have smart phones.

Now we need to figure out what percentage of the smart phone market share does the Pixel represent. I know that Android OS represents about 70% of the global smart phone market. So 70% of 3.5 billion is approximately 2.45B.

Out of that 2.45B people with Android smart phones we need to figure out how many use Pixel. As great of a company as Google is, I am going to make the assumption that they only have approximately 10% market share amongst Android device manufacturers. Other companies like Samsung and Huawei are much more established in the market and Google is based out of the U.S. so we may tend to over magnify how important it is on the global level. 10% of 2.45B is 245 million users with Google Pixel phones.

If there are 245 million google Pixel phone owners, we need to establish how often they purchase new phones. I don't know or have any reference numbers for this so I'm going to go ahead and analyze my own behavior and extrapolate based upon that. In the past 9 years I have owned three phones. This puts me at purchasing a new phone every three years and the expected value of me buying a new phone this year to be 1/3 = .33 worth of phones. If we apply that to 245 million we get 245/3 = ~81.5M.

Out of the assumptions I made above, I think there are two of them that could be particularly off. The first one is that I assumed the rest of the world had the same smart phone market penetration as China. China is a very technologically advanced country and in reality the majority of the world is not as smart phone savvy.

The second assumption that could be further refined and improved is the one about Pixel Android market share. I'm not very knowledgable about the popularity of the Pixel in relation to other smart phone manufacturers so this could be very off.
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Solid answer but I think a few tweaks to the framework will help

1.       Ask clarifying questions – while this is a pretty starting forward question a few clarifications would help

a.       New phone sales only? Yes

b.       Sales means – any product exchange – technically some of the contracts are leases – but we are calling them sales?  Yes

2.       Tell the interviewer how you are going to solve the problem

a.       I’m going to figure out how many people own a cell phone in the world

b.       I’m going to reduce that by the percentage that are likely pixel

c.       I’m going to look at the refresh rate

d.       That should yield sales per year

e.       Throughout I’m going to segment the world by 1st world nations and 2nd world nations and assume the ownership and refresh rate is different. 

3.       Break down the equations and tell the interviewer where you got the assumptions from

a.       I work in tech when I think about all the people that I know very few own a pixel.  Maybe 1 out of 100.  Because of my profession I am likely an ever estimation of pixel ownership.  I think the market penetration for 1st world countries will be ~1% as an upward bound. 

b.       That estimation might not be right but I gave the interviewer an explanation of my thinking. 

c.       I also think that you should knockdown that % for non 1st world counties where ownership is likely lower.

d.       I would do the same for refresh rate as well.  If the avg refresh rate in the 1st world is every 2 years, then make it 3 or 4 years for the 2nd world nations. 

4.       Solve the equation – you did this

5.       Sanity check – you start this by recognizing that there are two assumptions that could be off – but here you can actually redo a small portion of the equation.  I think that number seems high – If I reduced the ownership rate of Pixel from 10% to x% then the number would come down to and that feels more appropriate. 

Keep practicing.

 

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Clarification: We are talking of new phone only, not uses pixel phones.

We are talking only of consumer purchase, not business purchase

.# of pixel phone in a year = (# people with smart phone * Mkt share of pixel phone ) / Freq. of pixel purchase

==== # of smart phone users

 

 

 

World pop = 7Bn

Kids 10 and under usually do not have phones, average life expectancy = 80 years

Dividing population evenly population that may have mobile phone is 7 * 7/8 = 6.1 bn 

However there are many poorer countries and older age group that may not own a smartphone. 

No. of people with smart phones = 50% of population that may have mobile phone, 6 * .5 =  3 Bn 

When we look globally iphone has around 20%, samsung around 20%, rest around 60%. 

       I believe pixel market share would be around 5%

Freq of pixel purchase: Most people in US buy smart phones every 2 years. However all these smart phones are of good quality, 

People buying pixel phones are little price and cost conscious, So I would say freq of purchase is 3 years.

# of pixel phones in a year = (3 Bn * .05) / 3

           = (3000 M * .05) / 3 = 150 M / 3

                                              = 50 M 

# of pixel phones sold in a year = 50M

 

 

 

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