Google Doubles Down on Hardware With New Phones and Speakers
By Jack Nicas
SAN FRANCISCO -- Google is hoping the second time is the charm.
At an event Wednesday at the SFJAZZ Center here, the tech giant unveiled the second generation of its line of hardware devices it introduced last year, including its Pixel smartphone and Google Home speaker, touting technology upgrades and sleeker designs.
Google, the core unit of Alphabet Inc., is betting the upgraded devices will help it crack the competitive market for consumer-tech devices and catch up to juggernauts Apple Inc., Samsung Electronics Co. and Amazon.com Inc.
Google's new home speakers range in price from $50 to $400, challenging Apple at the top of the market and Amazon at the bottom.
Throughout the event, Google touted the devices' smarts as a main selling point, versus their hardware upgrades.
"To be honest, it's going to be tougher and tougher for people to develop new exciting products each year because that is no longer the timetable for big leaps forward in hardware alone. And that is why we're taking a very different approach," Google hardware chief Rick Osterloh said at the event. "The next big innovation will happen at the intersection of AI, software and hardware."
The new launches followed a mixed first year for Google's renewed hardware push. The devices received generally positive reviews, but the Pixel was hit by supply shortages and captured a tiny share of the market in the U.S. and abroad. Google Home put a small dent in the market share of Amazon's Echo competitor.
With the Pixel, Google is attempting to elbow into a field dominated by Samsung and Apple. The new versions -- the $650 Pixel 2 and larger $850 Pixel 2 XL -- include the ability to squeeze the phone to activate its virtual assistant and an upgraded camera.
Last month, Google bought part of Taiwanese phone maker HTC Corp., which helped develop the Pixel, for $1.1 billion to accelerate its effort in smartphones. Google's first foray into phones, its purchase of Motorola Mobility for $12.5 billion five years ago, was a flop.
Research firm IDC said Google had a 1% share of the U.S. smartphone market in the second quarter, compared with 32% for Apple and 32% for Samsung.
The Pixels don't include a headphone jack, following a controversial move by Apple last year. With that move, Google also debuted $160 wireless headphones called Google Pixel Buds, which have a feature to enable real-time translation between speakers using Google's translation service.
Regardless of the Pixel's upgrades, "Google's main challenge is now...to make them available to consumers on the shelves," Forrester analyst Thomas Husson said. "It implies mastering the supply chain, partnering with carriers and other distribution channels, training vendors and investing a lot in marketing. That is no small task and quite far away from the company's DNA."
One major disadvantage for the Pixel: Verizon Communications Inc. is the only major carrier to sell it. In a sign of that reliance, Google filled the front row at its event Wednesday with top Verizon salespeople.
Google's two new smart speakers straddle the high and low ends of the rapidly growing market. One is a large, loud $400 speaker -- priced to compete with Apple's upcoming $350 HomePod -- called the Google Home Max that Google says can tweak its sound to fit the dimensions of a room. The other, the Google Home Mini, is a $50 speaker that is smaller than a doughnut -- and appears to be just a smaller version of its one-year-old Google Home, which costs $130.
The new cheaper device points to competition with Amazon, which last week introduced several new versions of its market-leading Echo speaker.
Google entered the speaker market last year, a year after Amazon created it with the Echo.
In the second quarter, Google Home accounted for 17% of all smart speakers shipped world-wide, well behind Amazon's 78% share, according to Strategy Analytics. On Wednesday, Sonos Inc., the pioneer in wireless speakers, debuted its first smart speaker at $200, saying it will eventually work with virtual assistants from Amazon, Google and maybe Apple.
Analysts say Google's strategy with the smart speakers is less about hardware sales and more about getting its virtual assistant inside of users' homes, a beachhead that could eventually boost its massive advertising business. Indeed, Google is giving away a Google Home Mini with each Pixel.
Google also debuted a new Chromebook laptop and a small wearable camera. The $250 wearable camera, called Google Clips, is designed to capture candid photos.
Google also released a $1,000 laptop called the Pixel Chromebook, positioning it at the top of its generally low-cost Chromebook line of laptops, most of which are made by third parties. The Pixel Chromebook converts to a tablet, includes its virtual assistant and pairs with a $100 stylus.
Write to Jack Nicas at firstname.lastname@example.org
(END) Dow Jones Newswires
October 04, 2017 16:25 ET (20:25 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.