Google has become increasingly worried about Apple winning market share from Samsung, with increasing numbers of Android owners switching to iPhones, according to a new report today …
Citing an internal document, The Information says that the search giant plans to double-down on Google hardware, including its Pixel phones.
It may be Google’s worst nightmare. Apple’s iPhone is stealing share from Samsung phones powered by Google’s Android software. At the same time, U.S. antitrust regulators are scrutinizing Google’s search deal with Apple, raising the prospect that Google’s search may lose its favored position in the Safari browser on iPhones.
These twin developments, which threaten Google’s mobile ads business, have prompted the tech giant to take a big gamble. It is doubling down on investment in its own hardware, including its Pixel phones, including by moving product development and software engineering staff working on features for non-Google hardware to work on Google-branded devices, according to an internal document viewed by The Information.
The stance reportedly comes from the top, with Google CEO Sundar Pichai said to be behind the decision.
Greater focus on Pixel hardware
The document indicates that Google doesn’t plan to reduce its support for Samsung, but does believe that the once-dominant Android smartphone maker is struggling to compete with Apple, and that the best way to protect the platform is through more Google-made hardware.
The company currently uses Pixel branding for phones, watches, and earbuds.
The company had already responded to a reduction in ad revenue by budget cuts, and that these are being targeted at projects outside the company’s priority areas. This includes reducing work on Google Assistant support for third-party products – including cars.
Hsiao, a vice president in charge of Assistant, which is similar to Apple’s Siri voice assistant, has told some colleagues at Google that the Android Automotive operating system, used by carmakers including Volvo and BMW to power their infotainment systems, could soon generate about $1 billion in revenue for Google annually. That amount is too small to make a difference for the company, whose revenue last year was $257.6 billion, Hsiao said, which is why she has considered diverting some head count away from the effort, she said, according to a person briefed about the comments. She oversees more than 2,000 people.
The strategy could be a risky one, given that Pixel hardware has so far barely made a dent in the market. The report notes that Pixel phone sales last year totalled just 4.5M, against 230M iPhones.
The company seems to be pinning its current hopes on pricing, with its latest models cheaper than Apple’s current line-up.
Google declined to comment on the piece.
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