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Alphabet Inc – Is Google Assistant Going Everywhere? (GOOGL)

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Alphabet Inc's (NASDAQ: GOOG , NASDAQ: GOOGL ) Google Pixel Phone holds a significant advantage over third-party Android smartphones. Since its release, Google Assistant - the new AI powered personal assistant - has been a Pixel Phone exclusive. Third-party smartphones remain stuck with the previous generation Google Now. However, Google released an Android "alpha" build late last week and the new Android release enables Google Assistant on third-party smartphones.

Alphabet Inc - Is Google Assistant Going Everywhere? (GOOGL)

Source: Google

GOOGL's third-party Android smartphone partners have been feeling a little betrayed since the release of the Pixel Phone last fall.

Up until then, Google had not been directly competing against them. It developed Android and allowed them to use the operating system on their phones for free - a fair trade off for the hundreds of millions of mobile devices defaulting to revenue-generating Google search. Google did release the Nexus line of smartphones, but they were more of a showcase for Android than an attempt to compete against its partners.

The Pixel Phone's Google Assistant Advantage

The Pixel Phone changed the equation. It was stamped with the Google name for the first time and it was designed to compete head-to-head with the best of the Android smartphones. In another first, a key new Android feature - Google Assistant - was a Pixel Phone exclusive. Google Assistant leverages Alphabet's latest AI technology in a personal digital assistant that goes beyond Google Now, even gaining the ability to participate in two-way conversations.

The situation was serious enough to help convince Android smartphone leader Samsung Electronic Co Ltd (OTCMKTS: SSNLF ) that it needed its own personal assistant. Samsung's Bixby is expected to debut on the Galaxy S8 .

New Android Release Spills the Beans: Google Assistant for All?

Android Police examined a developer "alpha" release of Android over the weekend and discovered that GOOGL may be having a change of heart about keeping Google Assistant to itself.

Its team was able to activate and use Google Assistant on several non-Pixel smartphones, including a Samsung Galaxy Note 5 running Android Marshmallow and a Nexus 6P running Android Nougat.

This means that GOOGL is at least experimenting with making Google Assistant available to third-party smartphones in an upcoming new Android release.

Where Would This Leave the Pixel Phone?

While Google's Pixel Phone has premium design and a very nice camera, its primary advantage over third-party smartphones is the exclusive availability of Google Assistant. Take that away and it's more or less competing on a level footing with the big guns from the likes of Samsung. True, the Pixel Phone is guaranteed Android updates, but that's no different than the Nexus phones.

With AI and digital assistants in the spotlight, Google may have decided that having Google Assistant become a standard Android feature is important to maintain its lead over Apple Inc.'s (NASDAQ: AAPL ) iPhones and Siri.

I wrote a few days ago about Google's struggle against Amazon.com, Inc. (NASDAQ: AMZN ) in the smart home . The Amazon Echo and Alexa have taken a huge lead there and Google Assistant on the Google Home speaker and Pixel Phones may not be enough to catch it. If it were to give up its exclusivity and enable Google Assistant on third-party smartphones, GOOGL would suddenly have hundreds of millions of additional devices in play. This would give it far more leverage against Amazon, at the cost of the Pixel Phone competing on a more level playing field.

And the company has always marketed the Pixel Phone as being the "first phone" with Google Assistant - not the "only phone" - leaving the door open for an eventual general roll-out.

Of course, at this point we aren't certain that GOOGL will pull the trigger. The new Android release in question is alpha software - that's before beta. The company may simply be having some developers test Google Assistant compatibility with third-party hardware with no intention of actually opening up the feature. However, hints like the message "New! You just got the Google Assistant" suggest that GOOGL is leaning toward ending Pixel Phone exclusivity and rolling out the AI-powered feature as part of a general Android release.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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