Alphabet inc, Google’s parent company, announced their new line of smartphones Tuesday the 4th of October. You might know Google smartphones from their six year old line of smartphones called Nexus, which was only a small dip in the smartphone hardware business as their phones were outsourced to many other smartphone makers like Samsung and LG. However, this time around it’s different because Google is bringing their hardware and software design under the same roof with their new smartphone called Pixel and the Pixel XL.
The philosophy of striving for a tight integration of hardware and software looks a lot like Apple’s longstanding philosophy. This, together with Googles string of announcements, a new smartphone with high end camera, a speaker for the living room, a virtual headset and a new Wi-Fi router, shows that the company is definitely intending to compete with apple.
Google hardware chief Rick Osterloh, responsible for Googles reorganization that placed once-disparate hardware teams from Google glass, Chromecast and pixel under the same roof, mentioned that by making hardware and software work together, innovating would be much easier. Googles contribution to the Nexus phone didn’t happen until the phone was 90% done. Now, Google is responsible for most of the production except for the assembling part, which is done by HTC.
Why I put so much emphasize on the fact that Google is completely manufacturing their own smartphone is not only because it’s a very big, risky and financial commitment, but also because they are taking many pages from Apple’s playbook, which will be their biggest competitor in the high-end $400 billion global smartphone market. The question however is: will it be enough to take off in the already saturated smartphone market?
Google believes that the future of mobile phones won’t just be the best performing phone based on hardware and software, which they call a ‘mobile first’. They believe that the focus on a mobile first will shift to an AI first, where the phone will mainly be controlled by AI, instead of the familiar smartphone interfaces. ‘’Real innovation is where hardware and software intersect, with AI in its center,’’ as mentioned by Google CEO Sundar Pichai. The Pixel and the Pixel XL will be the first mobile devices that will have Google Assistant, which will be one of the phones main selling points. With your Assistant, you can have a natural conversation with Google to find answers or get things done on the go. With the Google Assistant, Google is trying to compete with the likes of Apple’s Siri, and Amazon’s Alexa, which are all similar voice controlled assistants trying to gain supremacy as more and more people searching the web and making purchases by voice commands.
Another big selling point for Google’s Pixel and Pixel XL is their camera, or as Google calls it: The best smartphone camera ever. The Pixel’s DxOMark, a reference for image quality used by many smartphone makers, is 89, which is higher than the recently released iPhone 7 or any other smartphone at the moment. This will make the Pixel very competitive accompanied with its free unlimited storage in the cloud. Will this however be enough to win enough market share from other smartphone giants like Apple and Samsung? Some say that Samsung will be the biggest victim to the Pixel because Google’s phone will be the first device to launch with the new Android operating system Nougat 7.1. Google pushing its own hardware might also complicate things with other Android licensees as Android profits a lot from free embedded services offered by Google.
Smartphone industry analyst Patrick Moorhead also mentioned that besides the camera there isn’t much diversification compared to the seventh generation Samsung and Apple devices. Early benchmarks offered by Geekbench 4 also showed that the pixel and Pixel XL are outperformed by the iPhone 7 based on their technical specifications.
Only time will tell if the Pixel and Pixel XL will actually take off and take market share from big competitors like Samsung and Apple. However, Google joining the Smartphone market with their own hardware could bring some innovations to the saturated smartphone market. Will Google be the company to lead the Smartphone market of AI controlled devices, or is this a passing trend? The two smartphones will release October 20th, and that’s when we’ll see how it performs compared to the other smartphone giants.
Sources:
https://www.bloomberg.com/news/articles/2016-10-04/behind-the-pixel-google-s-first-real-threat-to-apple-s-iphone
https://blog.google/products/pixel/introducing-pixel-our-new-phone-made-google/
http://www.reuters.com/article/us-google-hardware-idUSKCN12409J
Everything you need to know from Google’s Pixel event
http://appleinsider.com/articles/16/10/05/apples-iphone-7-handily-outperforms-new-google-pixel-in-early-benchmarks
http://www.theinquirer.net/inquirer/news/2469877/google-pixel-and-pixel-xl-release-date-specs-and-price
Thank you for the interesting article. The forthcoming battle of Google and Apple in the smartphone market will be eye-opening. Google is expected to release a high quality product in order to compete with Apple, but Google also is a new player in the market that has not laid as strong marketing foundations as Apple has. Apple’s brand is so strong that even when removing features from new releases of the iphone for business reasons and providing an inferior or similar product to a previous version, customers remain loyal (http://www.businessinsider.com/iphone-7-marketing-headphone-jack-2016-9?international=true&r=US&IR=T).
Of course, on the other hand such decisions from Apple may provide Google with an opening to snatch potentially dissatisfied Apple customers. Overall, increased competition on the high end smartphone market can only benefit the consumers, who will be able to choose from an increased variety of quality products. Google’s entrance will keep both Apple and Samsung on their toes, making them strive for increased differentiation and product quality.
Hi Jorian, thank you for your interesting post. I think the announcement of the Google Pixal and Pixal XL is interesting. Of course Google had the Nexus before, but as you mentioned this was a project that was in strong collaboration with partners. By competitors the Nexus was seen as a hobby of Google. The announcement of the Pixal and Pixal XL can be seen as the end of a hobby project.
As mentioned in your blog, the Pixal is not differentiate itself compared to the seventh generation Samsung and Apple devices. This is in line with my opinion. However, it is remarkable that Google is moving from being only a software developer, to a developer of both software and hardware. This can disrupt the industry because with the announcement of the Pixal and Pixal XL, Google become a direct competitor of their current partners as Samsung and LG that use Android. Will Google still provide Samsung and LG with the newest versions of android? Thereby I also read the rumour that Google is working on a new generation of phones, with the name project Polygon.
Besides that google is working on the Ploygon project, Android is working on a merge of Android and Chrome OS, the so-called Andromeda. Maybe this two can be combined and the next generation Google phones Google will run on Andromeda, and this could be a game changer. Therefore I think this can be the start of an interesting period for the market of mobile devices, and I believe that Google does not see mobile devices as a hobby.
http://www.nu.nl/reviews/4331561/eerste-indruk-nieuwe-google-telefoons-draaien-vooral-software.html
https://tweakers.net/nieuws/116451/gerucht-google-maakt-opvolger-pixel-telefoons-onder-codenaam-project-polygon.html
Thanks Jorian for your blog. Although I follow subjects like these on a daily basis, I’ve read some interesting things. Lampros and Johan too, you know what you are talking about.
Besides maybe some incremental advantages over Pixels competitors like a better camera or higher benchmark scores, it looks like the biggest innovation google is focusing on is the Google Assistant. And this is the basis of the concern I would like to share.
In order for the assistant to understand what you want from it, it has to know everything from you. As demonstrated in the launch event of the Pixel, it for example reads everything that is on your screen. It is of course nice to quickly see how far the restaurant is you are talking about on Whatsapp, but having information stored somewhere about everything that is on my phone, my day-to-day activities and habits or the things I talk about could become a nightmare. It is not once we have heard about large data breaches this year, think about LinkedIn, Dropbox, Yahoo, Ebay, and so on (http://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/). I of course not want sensitive information getting into the wrong hands. It looks like a problem that while for example whatsapp just introduced encrypted messages, Google Assistant is reading them. In my opinion Google is way to vague on this subject right now.
I am curious of what is coming our way and how Google will try to exploit this new information inflow (Google’s core business is still advertising).
ps: I don’t like the fact that the phone is not waterproof and I would’ve expected from google to make the phone cheaper ( €1.009,- for the 128 GB version).
http://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/
http://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/
http://www.adweek.com/news/technology/googles-ad-revenue-hits-19-billion-even-mobile-continues-pose-challenges-172722