Google’s parent company, Alphabet, just held its Q4 earnings call, and like much of the tech industry, the company had a less than stellar end to 2022. However, the outlook wasn’t bleak across the board — several of Google’s more consumer-oriented ventures had a solid quarter, leading the company to promise an increased focus on products like YouTube Shorts, YouTube Music, and its Pixel line of phones, earbuds, and smartwatches.

According to the report, operating income was at $18.1 billion in Q4 2022, down 17% from last year’s $21.9 billion. Net income in the fourth quarter was down 34% year over year, from $20.6 billion to $13.6 billion. Numbers for the full 2022 fiscal year were less grim, with operating income only falling from $78.7 billion in 2021 to $74.8 billion in 2022 (-5%), and net income dropping from $76 billion to $60 billion (-21%). Interestingly, overall revenues were up 1% YoY to $76 billion, pointing to increased operating costs as the primary driver of negative growth in the quarter.

Google’s Pixel lineup had a surprisingly strong 2022. According to Alphabet CEO Sundar Pichai, “2022's Pixel 6a, 7, and 7 Pro are the best-selling generation of phones” the company has ever launched. Pichai went on to note that Pixels “gained share in every market” Google operated in this year. When pressed for comment, the company’s chief executive had this to say about the growth of the flagship phone lineup:

Alphabet CFO Ruth Porat offered some insight into Google’s plans for increased focus on its Pixel phones in 2023, stating that, “We continue to make sizable investments, particularly to support innovation across our Pixel family, while working to drive greater focus and cost efficiencies across the portfolio.” Pichai mirrored that sentiment, adding, “We are working to improve the economics and hardware as we focus more intently on the Pixel line and our overall cost structure there.”

Google isn’t just seeing growth in its Pixel phones — the Pixel Watch is apparently off to a good start as an ambassador of WearOS and Google’s growing hardware ecosystem. Per Pichai, “I think users are thinking beyond phones and thinking through a holistic ecosystem. To give one example, us undertaking Pixel Watch, and as part of that, integrating Fitbit and bringing it to our ecosystem as well, partnering closely with Samsung on wearables. The combination is what has driven over a 300% increase in actives on [the] Android watches ecosystem.”

In software and services, Pichai noted that YouTube Shorts are now averaging over 50 billion daily views, which is up from 30 billion in 2021. YouTube Music and YouTube Premium subscribership grew to a record 80 million, counting users on free trials. In response to these numbers, Alphabet said it would increase its focus on YouTube Shorts while putting more effort into the large-screen format with products like YouTube TV and YouTube Primetime. The company also said it would be investing more in its YouTube subscription offerings.

Google is also prepping for a big year with its AI technologies, perhaps after feeling the pressure of competition with the success of ChatGPT. Pichai revealed that some of Google’s more mature AI models will be made available to the public in the coming months, starting with the conversational LaMDA, and perhaps being followed by the more mathematical PaLM. This aligns nicely with recent reports that the company has been testing a ChatGPT competitor for Google Search called Apprentice Bard.

These numbers come on the heels of a Q3 2022 earnings report that saw increased year-over-year revenue, yet a drop in operating income for Alphabet. Meanwhile, the Q2 2022 financial report had modest YoY increases across the board, and the Q1 2022 report noted more robust earnings when compared to the previous year. So, there’s an obvious downward trend across the last four reports, but Alphabet appears hopeful that investing in these more recently successful ventures will set things right in 2023.