Google’s Pixel phone, which was launched last week, has put the company in an odd position – one where they are competing with their own customers because the phone is being made completely by Google, from design all the way to marketing. The strange thing is that Google is determined to follow this path, which is heavy on assets and low on profits.
Several studies have shown that asset builders (Ford, Marriott, FedEx, etc.) constantly deliver weaker results than companies that maintain user networks (Airbnb, Uber, Alibaba etc.) focused on interaction because they don’t have to put money into building a physical infrastructure, making expansion much easier and faster to achieve.
So, why is Google so desperate to get into the asset (hardware) business? After all, the Pixel is extremely similar to other high-end smartphones. Of course, the fact that in 15 minutes you can get a 7-hour charge for the battery is nothing to scoff at. However, the unit is missing other things, such as the stereo speakers and waterproofing the iPhone 7 boasts. So, at the moment, there isn’t much differentiation between the Pixel and other phones in the same bracket.
Where the real difference lies is in integrating artificial intelligence into the unit. Pixel comes with Google Assistant, which is like Apple’s Siri, Microsoft’s Cortana or Amazon’s Alexa. However, because of all the data and knowledge of people and the world Google has gathered over the past 18 years, their AI seems to be much smarter than its peers.
For example, when it was asked to “Play the Shakira song from Zootopia,” it was able to fulfil the request, whereas the other assistants were at a loss.
Google Assistant can also provide information on local businesses, traffic predictions and directions. Its integrated with all other services from Google and the more people use these services, the better the Assistant will become.
So, the idea is that Pixel will make it much more expensive for people to change to another provider. And Google is trying to get the Assistant to the point where it can do things like buy a present a friend, reserve a table at your favorite restaurant on your anniversary, remind you to leave at the right time and order an Uber to ensure you get to your destination on time. All by itself without any input from you.
But to get to this point, Google needs to make sure the industry advances, which is hard when its partners are focused on other areas. The idea is that, in the end, the device doesn’t really matter. It’s merely a user interface and it’s likely that Google has no plans to remain in the hardware business. Their goal is to make their AI an integral part of as many people’s lives as possible and the best way to do that is to give them the right devices. Once the rest of the world has caught up to Google, they’ll likely back off the hardware train, going back to what they do most, namely focusing on their algorithm.
