Google adds some Pixels

Internet giant Google ramped up its involvement in the consumer hardware space with the launch of new Pixel branded smartphones and tablets as well as a home hub.

The Pixel 3 and its XL variant offer both an industrial design and spec upgrade on their predecessors. Initial impressions indicate the redesign is well received and the spec upgrades are significant. There also seems to be more AI stuff going on, including a call screening functions that taps into Duplex technology to save you having to interact with a caller if you’re not sure about them.

Google debuted a new device category in the form of the Pixel Slate – a tablet running Chrome OS that seems to be positioned as a direct competitor to Microsoft’s Surface product range, with an emphasis on hybrid laptop functionality. Once more initial takes seem positive, especially about its attempt to be the best of both worlds, although the full range of requisite peripherals and accessories does make it an expensive proposition.

Lastly we have the Home Hub, which is an AI-driven smart speaker with a 7-inch screen that will compete with equivalent products from Amazon and Facebook. One big difference is that Google is making a virtue of it not having a camera installed in an apparent bid for people to take it into the bedroom or even the bog. There’s also a physical mute switch to prevent the device listening to you, which seems like a good say to allay fears about being spied on by Google, but does call into question what the point of the device is.

“Our goal with these new products, as always, is to create something that serves a purpose in people’s lives – products that are so useful they make people wonder how they ever lived without them,” said Rick Osterloh, VP of Hardware at Google. “The simple yet beautiful design of these new devices continue to bring the smarts of the technology to the forefront, while providing users with a bold piece of hardware.”

The Pixel 3 starts at £739, with the XL coming in at £869. The Slate starts at £549 without peripherals, while the Home Hub will set you back £139. Google has managed to throw down the gauntlet to the majority of the consumer tech world with one set of launches, which is fun, but time will tell whether any of them are able to claim significant market share. Here’s a vid.

 

Google bids for AR and AI leadership with new Pixel 2 smartphone

Internet giant Google’s big gadget unveil is all about positioning itself for the artificial intelligence era, not becoming an iPhone killer.

The flagship product is the Pixel 2 – a product so important for Google that it blew a billion bucks on beefing up its R&D team. As a premium smartphone the specs seem to measure up, with the camera apparently of the highest standard. But top components have been table stakes in the smartphone game for some time; Google’s aim is not to go toe-to-toe with Apple and Samsung.

Google is investing in smartphones and other hardware such as smart speakers, laptops, etc partly to showcase what’s possible with the latest versions of Android (which was also the point of the Nexus series), but more importantly to invest in the installed base for its services.

The main point of Android was to create a platform for Google products and services – principally search, but also maps, Gmail, etc, against which further advertising could be sold. Google won the battle for the mobile internet but the new battleground is the voice-driven AI assistant. As Apple has shown with Siri, it’s not enough just to be first to market with this stuff, your AI platform needs to be ubiquitous if you want it to get mainstream traction. The frontrunner in this respect is Amazon and its Alexa platform and Google seems to be more concerned with that then making the next ‘iPhone killer’.

That won’t stop gadget commentators from constantly leaning on that cliché, of course, but there are signs that the penny is starting to drop. “Google has a mountain to climb if it wants to displace Apple’s iPhone. Even challenging Samsung, which has a trio of superb Android-powered flagship devices, will be tough,” said Ben Wood of CCS Insight.

“Although Google is promising that Pixel 2 will be available in more markets than the original Pixel devices it is will still only be offered in a handful of countries. This underlines Google’s limited ambitions at present with the Pixel being more about the “art of the possible” on Android phones rather than a serious threat to Apple.”

“When it comes to smart speakers there is now a bewildering variety of different devices for consumers to choose from including Apple, Amazon, Google, Sonos, Sony and more. Amazon’s first mover advantage with Alexa and Echo combined with aggressive pricing and an ever increasing range of “skills” (which recently passed the 25,000 milestone) means Google and others have a lot of catching up to do.”

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One area Google seems to think it can compete well in is the underlying AI. Alexa does seem a bit limited in this respect – hence the defined ‘skills’ – so using its growing portfolio of in-house gadgets to promote its capabilities in that area would seem wise. Also Amazon utterly failed in the smartphone market, so Google can point to augmented reality as an extra string to its bow that Amazon lacks.

This isn’t the place to pore over the various bells and whistles claimed by the devices, we’ll leave it to the videos below to do that. But it’s clear from the products themselves and from Google’s supporting press tour that a cornerstone of Google’s forward strategy is bossing the AI era, which on the consumer side means getting people to use as many Google AI-driven products as possible.

 

Google cherry-picks the best bits of HTC for $1.1 billion

HTC has accepted $1.1 billion to hand over much of its smartphone engineering talent and IP to Google.

Some kind of M&A involving the two has been on the grapevine for some time but the assumption was that Google would simply buy HTC with the kind of cash Larry Page routinely finds down the back of his primary-coloured beanbag-sofa. In the end Google was able to just pluck out only the parts of the company it wanted.

The main acquisition is a reported 2,000 smartphone engineers, many of whom are already working on the Google Pixel phones, which are white-labelled by HTC. On top of that Google gets a non-exclusive license to a bunch of HTC smartphone IP. For this Google is shelling out $1.1 billion which, at first glance, seems like a good deal for HTC.

HTC’s total headcount is currently around 10,000 and its market cap is around $1.9 billion, so Google is handing over cash that’s equivalent to 58% of the company for just 20% of its people and no outright ownership of any of its assets. HTC is spinning this as enabling it to reduce overheads and redouble its efforts on its own flagging smartphone operations as well as future bets such as VR.

Another way of looking at this move, however, is that HTC is mortgaging the future for an immediate cash injection. HTC has been running at a loss for ages and while losing 2,000 of its best engineers will reduce overheads, it must surely also cripple its smartphone R&D efforts.

In a masterpiece of doublespeak, HTC made the following statement at the top of its announcement: “Transaction Reinforces HTC’s Commitment to Innovation and Its Branded Smartphone Business.” It’s very hard to believe how getting rid of the cream of your smartphone engineers can achieve anything but the opposite of that.

For Google the big question is: How come you’re doing this after the Motorola acquisition went so wrong? The answer is probably two-fold. Firstly the main purpose of the Moto buy was probably to stockpile smartphone patents at a time when predatory patent litigation from the likes of Microsoft, Oracle and Apple threatened the whole Android ecosystem. Google messed around with phones for a bit but then flogged all but the patent parts to Lenovo.

Secondly Google has since decided to take making its own smartphones a bit more seriously; looking to take the lead in the premium Android segment with the Pixel range as Samsung continues to try to develop its own ecosystem. Google seems to have learned from the Moto move that it’s better to pay a premium for just the bits you want than aquire a bunch of superfluous stuff at a bargain, the disposal of which ends up costing more in the long term anyway.

“This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC smartphone and VIVE virtual reality businesses,” said Cher Wang, Chairwoman and CEO of HTC. “We believe HTC is well positioned to maintain our rich legacy of innovation and realize the potential of a new generation of connected products and services.”

“HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” said Rick Osterloh, SVP of Hardware at Google (pictured above with Wang and a veteran of the Motorola acquisition). “We’re excited and can’t wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”

Superficially this looks like a win-win, but scratch under the surface and it seems likely that HTC gratefully accepted whatever Google offered. That offer was probably more generous than it needed to be, perhaps partly because Google genuinely doesn’t want HTC, which was its very first OEM partner for the Nexus 1, to die.

But as this excellent Bloomerg analysis shows, HTC is unlikely to turn the corner without shedding a lot more overhead, especially in manufacturing capacity, which it over expanded after a couple of strong years at the start of the decade. What seems more likely is that HTC will gradually phase out its smartphone brand and focus entirely on things like VR, but it’s not about to shout that from the rooftops. Here’s the official rationale.

HTC Google strategic rationale