Google Pixel – Damage done pt. II.

Google is still not a hardware company.

  • Unnecessary problems with the latest Pixel device are a repeat of the issues that hampered the appeal of the Pixel 2 in 2017 which further reinforces my opinion that Google has no business selling hardware.
  • The latest issues involve the supposedly best in class camera which is now having problems when being activated by third-party apps such as Snapchat or WeChat.
  • This adds to other bugs which randomly added notches to the device’s screen, refused to save photos and suffered from memory management issues where apps would prematurely close.
  • These issues are very unfortunate as they draw attention away from some of the excellent and differentiating features that Google has put into the Pixel.
  • This will inevitably hurt its shipments and Google’s attempts to have any sort of relevance in hardware.
  • Google’s new features like Top Shot, Super Res Zoom and Night Sight are all AI-based computational photography features that almost entirely software based.
  • These features play directly to Google’s strengths in AI but user awareness of them is now likely to be hampered by the buggy unreliable image being cast by other problems being experienced.
  • Google will no doubt fix these problems, but it would be far better if these issues had never occurred in the first place.
  • This is no longer an isolated incident, but almost a regular occurrence (see here) and I think it is a symptom of a company that does not really understand hardware.
  • Google’s $1.1bn acquisition of parts of HTC also does not seem to have made any difference.
  • Consequently, despite the wondrous innovation that Google has put into the Pixel 3, it is unlikely to ever ship more than a rounding error, making Google’s continued foray into hardware, pointless in my opinion.
  • From this, it is clear to me that Samsung and Google are a great fit.
  • If Samsung was to abandon its aspirations to create in AI and work on a time-based exclusive deal with Google, I think its handsets and other devices would have far more appeal than they do today.
  • For example, Google’s superb portrait mode could be used to differentiate the imaging in the Galaxy s9 rather than the completely pointless variable aperture.
  • A much deeper integration of Google Assistant into Samsung devices rather than the universally awful Bixby would further set Samsung apart from the competition.
  • Obviously, Samsung would only have the exclusive on these technologies and features for maybe a quarter or two, but I think it would make its products far more attractive when compared to the iPhone.
  • The problem is that both companies seem to believe that they can replicate each other’s core competence which reviews and market forces have clearly shown not to be the case.
  • As long as this state of affairs persists, the advantage passes to the Chinese vendors like Huawei, Xiaomi, Oppo and Vivo who are increasingly looking to crush Samsung overseas as they have done at home.
  • It also helps Apple which I consider to be second-rate in AI as Google’s best innovations that could attract users to Android remain effectively not present in the market.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.

Blog Comments

If Google is to succeed in China, it needs a strong local partner. Huawei may want that relationship if it is likely to help it overtake Samsung and the Chinese government may accept it if there is useful access to Google’s AI.

Samsung, with its strength in White Goods, is very well positioned for data capture in the home – arguably better than Google. Samsung is therefore unlikely to give up on Bixby for a few more phone sales.

While the Android manufacturers do not support their top end phones more than a couple of years and charge iPhone prices, Apple will dominate the high end.

Good point. However, I think Google is never going to get back into China as the government wont want to see the local Champions over turned. Furthermore, because they are already well entrenched, it will be very difficult to dislodge them.

I see no reason why the partnershi could not be extended into white goods also… Samsung is totally at sea when it comes to data etc… 30% of something is better than 100% of nothing.