Google’s Pursuit of Happiness: #MadeByGoogle

on October 5, 2016

After weeks of speculations and leaks, Google finally announced its first #MadeByGoogle smartphones called Pixel and Pixel XL. Yet, the phones per se were the least interesting part of the event in my opinion. What was really interesting was Google’s focus on AI as the next platform after mobile and how, in order to be the winner in that battle, they feel the need to go deeper into hardware

Pixel is No Nexus

While the premise of the Pixel phones might be the same as Nexus – always the latest software and a pure experience – everything else points to a very different role these products will play for Google.

First, of course, the phones, made by HTC with the VR viewer Google branded. Second, Google stated they had a lot to do with the design of the phones vs the Nexus phones — which were a rebranded version of a specific marker flagship product.

The limited appeal of Nexus in the past, though, had little to do with how the phones were designed or who made them and a lot to do with how they were sold. With Pixel, Google is not just relying on the Google Store for distribution but is partnering with carriers across different markets — Verizon in the US, EE in the UK, Rogers in Canada, Deutsche Telekom in Germany — as well as key retailers such as BestBuy and Carphone. It seems quite clear Google will put a marketing budget behind these devices; something it did not do for Nexus.

I would expect sales volumes to be significantly higher than their previous Nexus products. Yes, I know that does not say much, given Nexus represented less than 1% of overall Android sales. But let’s be clear — Pixel is not designed to appeal to every Android user out there. Hence, the premium price.

The little pitch about the new feature that allows users to easily switch OS’, including helping you port iMessages, was a nice giveaway of who Google is hoping to capture. Before we get to iPhone users, though, I think an easier target is high-end Android customers, most of whom are using a Samsung Galaxy S phone now.

With Pixel being the first Daydream-ready phone and, most likely, the only one shipping in time for the holidays, Google adds VR as a cherry on the cake and will give the Daydream View free with preorders as well as pricing it $20 less than the Samsung Gear VR. This is more bad news for Samsung who has a clear head start in VR but will now face more competition and might need Facebook to be more of an enabler when it comes to content so as to compete with Google’s YouTube. Of course, YouTube VR access will not be exclusive to Daydream-ready devices but we could certainly see dedicated content for them as the user base grows.

Google is best on Pixel

Pixel is also clearly aiming at turning Android users into Google users with Pixel, Google Assistant, Allo, and Photos brought to the forefront so the user is not just engaged with the OS but engaged with Google more and more. There are many Android phones out there but only two Google phones for now. With this focus, Google might not need to make Android proprietary in order to control it.

If you think about the Android smartphone market now, you have Samsung and Huawei as the main player at a worldwide level. Then, you have a bunch of brands that are strong players in some markets. Then another group that is very localized. With Pixel, Google is playing a similar game as Microsoft is with Surface; they just seem to be less shy about it. So Google still needs all the other Android makers to churn out devices because not all Android users are interested in Google services or have access to those services or are actually valuable to Google. Google was quite careful at the end to talk about Google being best on Pixel vs Android, aside from the mention of being able to run the latest version. While Nexus was the purest Android experience, Pixel is the best Google experience. It will be interesting to see how the services differ on other devices going forward, if at all. Today, for instance, we heard that Pixel comes with Google Photos built in and offers free unlimited storage at full resolution for both pictures and videos.

Moving to an AI-First World

Before we got to the devices announcements, Sundar Pichai set the scene as to what the next battleground will be: AI. Google Assistant comes embedded in Pixel and in November, could enter our living room through Google Home. Pichai explained how “Google for everyone” will become “Google for you” (and you and you and you and you). Google Assistant will be tailored to you and your individual needs. Some may wonder why Google is actually bringing Google Home to market when there is an army of phones out there that could run the Assistant. Well, first of all, the army is not ready. Most of those phones run on old software that does not support Google Assistant. Although, if running Lollipop and up, you could have Allo running on your phone. Second, Google Home might convert some Apple users who are not quite ready to give up their iPhone yet but might be intrigued by a home device. Third, as Echo taught us, a voice-only device might get us to embrace our assistants faster and more deeply. Considering the aggressive price of $129, Google sure wants to sell a lot of these.

The demo was impressive from a conversational and range of knowledge perspective. The latter should not be a surprise, given Google has search in its DNA. While this less transactional exchange might make Google Home quite appealing, some of the use cases will be limited to the user who owns the account it is paired with.

You heard me talk in the past about the role personal assistants might have. When Google Home was introduced at Google I/O, I thought Alexa was depicted more as a Mary Poppins and Siri was more and more like Jarvis – especially now that she can whisper in my ear through AirPods. If Home can only be associated with one account, for now, it means it will only know about one person’s calendar appointments, shopping list, etc – pretty much everything but music as Google Home supports multiple music accounts. I am not sure if this setup decision plays to “the head of the household”, which seems to fit with women not generally being interested in interacting with Alexa according to our research. Yet, if you ask most families when it comes to family routine, calendars, homework and the like, it is really not the dad who is in charge – and yes I know I am stereotyping. So even Google Home seems to be more like Jarvis than Mary Poppins. It raises the question of, why do I need it in the home vs on my phone? Maybe this is why we have Pixel with an embedded Assistant and phones that run Allo.

There was more #MadeByGoogle at the event like the 4K Chromecast and Google Wifi but they were completing the picture rather than making it. What was absent was the rumored new platform mashing together Android and Chrome codenamed Andromeda. Though, given the focus of the event, such an announcement would have felt very much out of place. We’ll see if Andromeda will surface closer to Google I/O in 2017. There is a lot to digest from today and many questions will be answered when the devices start shipping later in the year.