Having control of all things is an important part of the Pixel. It puts the phone's future, as well as the future of Android itself, in Google's hands.
The Pixel and Pixel XL are not the first phones from Google. The very first Android phone — the T-Mobile G1 was a Google phone. The Nexus One started a run of phones from Google that lasted up until the Pixel launch, where we found out that the Nexus 6P and Nexus 5X were the last Nexuses. The idea of Google having phones built for one reason or another just isn't new. But the Pixel is an entirely different strategy.
Previous phones like that G1 or Nexus 5X were sold to be the reference device so people knew what worked and what didn't with the latest version of Android. Developers needed a phone they could test the different ways to do the things that make their apps great. When we say the Nexus phones were developer phones (which has been debatable for a while) what we mean is they are a bare-bones conduit for application developers to make their stuff work best with Android. You need things to work with the operating system before you try and make things work with the ways other companies have changed it. But the Pixel is not a reference phone.
I'm not entirely sure what Google expects developers to do when they need a platform reference to test new platform APIs and features. Maybe the Pixel brand will always incorporate them with no changes and can be used as such. That makes sense, but it's not why the Pixel exists. The Pixel is Google trying to be a phone manufacturer. They worked with HTC (and no, we don't know the exact details) but the phones themselves are Google's product and design. The software is no longer that bare-bones reference flavor and has a number of features that aren't part of Android for anyone else to use as they see fit. The Pixel is Google's baby, for good or bad.
That means they have complete control, and that can be an important thing. Let's look at why.
Support
Supporting a thing you sell — especially a $1,000 thing — is important. When a part goes bad or something gets broken, someone needs to be able to get it fixed and back in working order. If you break the screen on your Nexus 5X, LG will be happy to quote you a price to get it fixed. Same goes for Huawei and the Nexus 6P. But the Pixel will have Google taking care of hardware support themselves.
Support matters more when you're making phones for the mainstream.
I doubt they will be fixing phones at desks or Fruit Smoothie stands at the Mountain View campus. They'll probably ship it back to HTC if it needs any hardware issues taken care of. But the important part is that it's all done on their terms instead of another company deciding when to offer support or how much to charge. This isn't automatically a good thing. Google doesn't have a lot of experience fielding hardware warranty issues on a large scale. But it's theirs to do well with or screw things up.
The same goes for software support. The Pixel has a built-in support client in the settings where you can ask for help from Google if you have questions or issues. With Nexus models, they had a support channel that started with a Python script questionnaire and weaved through mailing lists and Google Groups. That doesn't work when the phones you're selling are designed for the mainstream. Once you go full retail, you'll have plenty of questions to answer and bugs to look into. Especially if you sell a lot of phones. Google needs to have complete control over the process if they hope to handle it well.
Having someone else build your phone and sticking their name on the back, then selling them alongside you makes it tough to do it your way. Controlling everything about the Pixel lets Google decide what they think is best when it comes to supporting them.
Security
Security on your phone might not be important to you but's it's very important to Google.
Every time there is a high-profile incident surrounding Android phones, Google takes one on the chin. Android is their product, and if some company gets lax and malware or hacking hits the news cycle, Google doesn't have to be at fault to take the brunt of the outrage. Google was never shy about "owning" the software on the Nexus line. Good or bad, no matter what came up they addressed it and provided a solution. Even when it took multiple solutions, we knew it was being addressed. They'll do the same with the Pixel and Pixel XL. The phones will be kept up to date (even Verizon has promised as much, though we've heard that before) and get monthly patches to address exploits both current and future. Nothing changes there.
Google takes security very seriously. More control means they can do a little more.
As a hardware partner — yes Google Hardware is a client and partner of Google Android as a separate entity — which builds their own phones they also have some say into support contracts with the people who made the components. Huawei was involved in getting security issues with the Qualcomm processor in the Nexus 6P resolved. Now there is no middleman and Google has to make sure they made the right contract and work with Qualcomm in a greater and different capacity to get things sorted if it were to happen again. The same goes for any and all software that is needed to support the hardware — if it gets exploited, Google can work directly as a licensee to help sort it out.
Like supporting customers, we have no guarantee that these changes will make things better. We assume Google has a plan and has thought long and hard about becoming a company that makes Android phones and will be able to offer the same, or a better, level of security for our private data.
Experience
This is an important — maybe the most important — reason Google benefits from having control over everything about the Pixel line. Google has always been a company that makes money from services, not from hardware sales. Google develops Android because having $100 phones means ever-more people can afford them and can use Google's services. Before the Pixel, it's not a stretch to think that Android was an operating loss for Google but happily continued because it supported the balance sheet in other ways. They don't appear to feel the same way about the Pixel.
Google will still make money from every iPhone sold (from its search deal and ads) and by keeping Android as a compelling lure for other companies that can't or don't want to spend the money to make their own software. But they seem to want to make money from Pixel sales, and that means they have to nail the experience so we have a reason to buy them.
The Pixel is Google's iPhone. It's what they think you'll love in the package they want it to be in.
They way they're doing it is in stark contrast to other companies who make Android phones. Samsung and LG make phones that deliver unique experiences through features not available elsewhere. The Note series may have taken some very hard knocks recently, but for years it was the phone to buy if you wanted the S Pen and all the features that came with it. The LG V10 was one of the best phones you could buy if you wanted to get more serious when you were creating and consuming media. Sometimes, the features weren't such a hit. S Voice never was as popular as Google's solution with Google Now, and the G5's modular idea failed to gain any traction at all. But Samsung and LG continue to push the envelope when it comes to the feature set.
Google isn't offering S Pens or HDR microphones or software that uses either. The Pixel isn't water resistant like phones from Samsung and Apple. It doesn't track your eyeballs to keep the screen from shutting off while you're looking at it. Instead, Google is offering a very specific set of features — including a Pixel-only Google Assistant — and focusing on making them work the way they think is best. They are selling you the Google Experience, and they think it's the best experience available. Tailoring both the software and the hardware, take the camera as an example, to bring it to you in a way they think is better than anyone else is doing it is only possible if they have control. Without the Pixel's camera-specific software and the image processing features and sensors of the Pixel hardware, that isn't possible.
Yes, this is what Apple does with the iPhone. In fact, the Pixel is Google's iPhone. Simple, powerful and wonderful — at least in their opinion — all at the same time. Whether or not we agree after using it remains to be seen.
This is how Google gets control of Android
Plenty of us wants to see Google force the companies making Android phones to do better. That's just not possible. Android is freely given to anyone who wants it and Google has no way of taking it back. They can't very well deny access to services they already agreed to give, like Google Play or Gmail, nor do they want to because that's how they make money from Android. Having companies do things their own way sometimes proves to be a PR disaster.
Controlling the experience is how Google wants to show how great Android can be.
Early in 2016, there was a rumor that Google was preparing to shame Android phone makers that didn't update their phones or that ruined the experience. On the surface that was — and is — a crazy idea. Throwing your partners under the bus will only make them unhappy, and unhappy partners are less willing to give into suggestions. Building a phone that showcases Android at its best, though, is an easy way for Google to separate themselves from companies who don't do enough to improve Android's image problem. They don't need to shame anyone if they can show how good it can be.
With the Pixel and Pixel XL, Google has complete control of an Android phone and the user experience that comes with it. There are some very legitimate concerns over the future of the "open" Android and a widening gap between what Google can do and what other companies can do, but the Pixel line is something Google has needed to do for a long time. If their experience is as good as they think it is, and if they haven't priced themselves into obscurity, the Pixel is great for their image when it comes to Android.
Any other effects they may have, good or bad, remain to be seen.