Google I/O – Google and Helpfulness, A Privacy Stance, and Low Cost Pixels

Before diving in, I think it is important to echo something I wrote about last year after Microsoft Build, Google IO, and Apple WWDC. The theme of this years developer events remains unchanged from last year. Everything is about incremental improvements, and there is nothing wrong with good technology getting better. One thing I highlighted last year again remains critically true. Consumers will value these improvements more than they will value brand new innovations. Nothing made that more clear than when one of the most applauded and tweeted about features announced at Google IO was that you could simply turn off Google’s assistant’s alarm just by saying stop. It sounds simple, but people prize efficiency and enjoy technology becoming more frictionless through incremental progress.

A More Helpful Google
There were a few “drink” phrases at Google IO yesterday. One was on device machine learning, which we will talk about shortly, but the other was helpful. I haven’t gone back through and counted but the word help, or helpful, was used many times during the keynote deliberately. It was embedded into a key positioning statement about Google itself from CEO Sundar Pichai when he stated: “Google is evolving from a company helping you find things to a company that helps you get things done.” Which is interesting in the light of platform battles because this also seems to be the focus of Apple and Microsoft as they continue to eliminate friction in the “getting things done” department for consumers. This overall theme and shift in focus for Google echo again a statement I made earlier that consumers prize efficiency. They want technology to get out of the way and make it easier for them to get the task at hand done quicker and easier so they can get back to more interesting things in their life.

Sundar Pichai went on to showcase a number of technologies that he put under the blanket of this phrase “we are focused on building a more helpful Google for everyone.” Going beyond just the software and services being helpful, Google’s hardware announcements were also positioned under the blanket of helpfulness.

Senior Vice President of Google’s hardware division Rick Osterloh talked about Google’s Nest hardware and smart assistant going beyond the smart home and focusing on making a more helpful home. He didn’t go so far as to say that our current smartphones are not helpful, but he insinuated smartphone based on Google technology are more helpful than others thanks to Google Assistant.

The broad theme here is how Google is tying search, Google lens, and a host of other backend services together into Google Assistant to make their assistant the best and more useful solution out there. And from the demo, Google Assistant seems to be the clear leader well ahead of Amazon Alexa and Apple’s Siri.

The most impressive part of Google’s new Assistant demo was how much of the experience they were able to move on device which brings speed and efficiency, and privacy which we will get to in a moment, and makes the Assistant experience that much better. Google’s ability to shrink all this technology from 100gb demands to .5gb of data so it can be enabled not just on premium devices but on lower-cost smartphones as well. Hopefully, you have seen the demo by now, but the speed and accuracy and reliability of Google Assistant is far ahead of all other assistants. Their learnings and efforts with cloud machine learning is what enabled the breakthroughs that allowed them to shrink the device demands and bring a fully on-device Assistant experience.

Google is laser-focused, with helpfulness as a central driving mission and it seems that underlying theme is coming out nicely with Google Assistant as a front-end.

Google’s Privacy Stance
If it wasn’t blatantly clear, the word of the year is privacy. Microsoft waved the privacy banner at BUILD, Facebook awkwardly attempted it at their F8 conference, Google is weaving the privacy narrative into their posture, and obviously, Apple will hit it hard at WWDC. The privacy posture being taken is important but should also be understood in context. Each company is taking an approach that still suits their needs or business model. In the case of Apple and Microsoft, they are more protective of your data than anyone, and in the case of Google they will go as far as needed, but they still need more data to keep the machine learning engine fed. Facebook’s approach is just laughable, and I remain a full skeptic of Facebook at large.

There are a few takeaways from Google’s privacy posture and the solutions they are implementing worth understanding. The first is why are they doing it. This goes beyond a response to Apple’s very public posture on privacy. There may be some of that at play, and there may also be some reasoning because it is the right thing to do. But ultimately, these changes are about putting policies in place that protect them from any government regulation. If you look at what is being implemented, it is not that different than what the European GDPR demands which is to put the user in control of how much data they give or do not give to any company.

Google is essentially pre-empting any regulation efforts by building GDPR like solutions into their services. Hence their clear explanation of how easy they are making it manage your privacy. Go anonymous or incognito with certain apps or services, automatically delete data, and more. These are all great and important features, but in reality, most consumers will not go down this hole to make themselves invisible to Google. But, the fact that they have the ability is all Google needs for indemnification.

Another takeaway I had, was Google’s attempt to reframe the privacy debate. Where Apple is saying we don’t know who you are and collect the minimum amount of data anonymously to make our products and services better, Google is saying we collect data, but we keep that data secure and private, so no third parties ever see it. The result is a slew of services from translation, to maps, to search, etc., that consumers clearly value. While there may not be an either/or the reality is for Google, I’m convinced their services are valuable enough to consumers they are willing to make the tradeoff of the information exchange as long as Google never breaks their trust with a data breach to third parties.

Low Cost Pixels
Lastly, I want to briefly touch on the Pixel 3A and Google’s aggressive pricing with Pixel phones now in the $399-499 range. This move brings up all sorts of questions about the mid-range priced smartphone market. Years back I built a smartphone model and predicted the shrinking of the mid-range price segment and that prediction proved true. We have low-cost and premium smartphones in the US, and there is not much action in the mid-range. That being said, I’ve had many conversations with carriers who continue to express interest in this category. I’m sure some of that feedback went to Google which helped influence this decision to go after the mid-range smartphone price band.

The strategy they are enabling, which is to bring premium features at mid-range prices is one that works well for many brands in many parts of the world. It just has not worked in the US. The US market seems to gravitate upward to price bands above $700 for a growing portion of the market. The rest of the market buys phones less than $300. The real question is whether or not there is much growth room for the mid-range priced Pixel 3A for consumers who buy lower cost phones to spend up, or for premium customers spending $700 or more to move down.

I strongly doubt many premium smartphone buyers will go downward, especially given the Pixel 3A does lack some specs that may not be worth the trade-off. But I do think there is an opportunity to move consumers who typically bought the lower price bands up to the price bands the Pixel 3A now competes.

The picture may be different in other parts of the world where $399-499 priced smartphones are a larger portion of the sales share. We know Pixel has not sold well globally, and I do think the 3A will help with Google’s global volumes. Interestingly, this is still a highly fluid strategy from Google. However, I do think their brand, and many specific Pixel features will become attractive to current Android owners who often flip from brand to brand which is a behavior common in the Pixel 3A price range.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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