LDN - Other News

Google takes on Apple, Amazon with new hardware push

[October 05, 2016] By Julia Love

SAN FRANCISCO (Reuters) - Alphabet Inc's Google on Tuesday announced a new "Pixel" smartphone and a suite of new consumer electronics products for the home, planting itself firmly in the hardware business and challenging Apple Inc's iPhone at the high end of the $400 billion global smartphone market.

The string of announcements - including the $649 Pixel, a smart speaker for the living room dubbed "Home," a virtual reality headset, and a new Wi-Fi router - is the clearest sign yet that Google intends to compete head-to-head with Apple, Amazon.com Inc and even manufacturers of phones using its own Android mobile operating system.

Company executives, echoing Apple's longstanding philosophy, said they were striving for tighter integration of hardware and software.

"The thinking is that if we can work on hardware and software together, we can innovate much better," Google hardware chief Rick Osterloh said in an interview with Reuters, citing a recent reorganization that united once-disparate hardware teams.

Under the new structure, the company has begun to take a much more integrated approach to things like supply chain management and design, added Mario Queiroz, a vice president of product management.

"The learnings from one product are benefiting another product," he said.

Unlike earlier Google phone efforts under the Nexus brand, the Pixel devices are designed and developed by Google from the start, although Taiwan's HTC Corp will serve as the contract manufacturer.

SWIPE AT APPLE

Taking another page from the Apple playbook, Google said it would work exclusively with a single carrier in the United States, Verizon Communications Inc, on the Pixel, emulating Apple's agreement to launch the original iPhone with AT&T Inc. That deal gave Apple unprecedented control over the look of the phone and how it worked.

Shares of Alphabet closed up 0.3 percent, while Verizon fell 1.2 percent.

The phone comes in two sizes, and its high-end camera is one of few distinguishing features, analysts said. The phones come in black, blue and silver and will be able to get up to a seven-hour charge in 15 minutes. Pre-orders begin on Tuesday.

"Aside from the camera, the new Google Pixels are pretty undifferentiated compared to Samsung and iPhone seventh generation phones," industry analyst Patrick Moorhead said.

While the new phones are clearly aimed at competing with the iPhone - Google executives took several swipes at Apple in their on-stage remarks - analysts said Android rivals like Samsung Electronics could be the biggest victim if the Pixel takes off.

Google's strategy of licensing Android for free and profiting from embedded services such as search and maps made Android the dominant mobile operating system with some 89 percent of the global market, according to IDC.

But Apple still rules the high end of the market, and Google has long been frustrated by the emergence of many variations of Android and the inconsistent experience that has produced. Pushing its own hardware will likely complicate its relationship with Android licensees, analysts said.

[to top of second column]

(L to R) Google Wifi, Google Chromecast Ultra, Google Home, Google Pixel XL, Google Pixel and Google Dreamview VR are displayed during the presentation of new Google hardware in San Francisco, California, U.S. October 4, 2016. REUTERS/Beck Diefenbach

ALL-PURPOSE ASSISTANT

Google kicked off the event Tuesday by touting the Google Assistant, the company's voice-activated artificial intelligence system and its answer to Apple's Siri and Amazon's Alexa. The presenter showed how a customers could make a restaurant reservation with a few phrases spoken into the phone.

The assistant will be embedded into the Pixel and Home products and is being positioned as the central feature in a family of integrated hardware and software products.

It is one of a handful of similar assistants that are vying for supremacy as more people search the web and make purchases online using voice commands, which may eventually supplant keyboards and touchscreens as the primary means of controlling digital devices.

While Google is often cited as the leader in artificial intelligence, Amazon stole a march on the company with its Alexa-powered Echo home speaker system, a surprise hit. The Home device and the Echo have many of the same features.

Google's "Daydream View" virtual reality headset, meanwhile, puts the company in competition with Facebook Inc, owner of Oculus. The device, which works with an Android phone, is far cheaper and simpler. It will be available in November for $79, in time for the end-of-year shopping season.

Home will also be available in November for $129, including a six-month trial of ad-free YouTube.

Google also unveiled a new version of its Chromecast digital media player and a router dubbed Google Wifi, both boasting the same sleek, minimalist design as the Home product.

"These look like products from a single company," said Queiroz, the Google executive.

(Reporting by Julia Love, additional writing by Peter Henderson; Editing by Bill Rigby and Alan Crosby)

Back to top