Why the Google Pixel is a bad idea (TSB Ep.6)

Google has recently launched their pixel phones and the media seems very excited about how Google is finally a competitor to Apple and how they will wipe the floor with Samsung and I'm just sitting here wondering if I'm the crazy one or these people just don't understand how the smartphone market works in either case I am Martin from tech author and in the 6th episode of the story behind Sears let me play the armchair CEO and tell you how to run a company no honestly I want you to think about this video and what I'm going to say not as a consumer who is looking for a device but as let's say a manager at Google and I'm going to make this video under the assumption that the pixel phones are supposed to be all out for profit devices that are supposed to be sold to regular consumers through regular channels in big quantities they're not some reference hardware like the Nexus phones were and if that is the case I have three massive problems with the pixel and they're so big I have a hard time understanding how managers at Google thought it was a good idea first let's talk about the seemingly obvious pixel and the open Android platform as we know it can't both win at the same time you can't have the world's largest and most successful platform to yourself with thousands of eager manufacturers on it and at the same time be the top manufacturer for that very platform it seems like a tempting idea except for it's only tempting to you the company who makes the platform and to everyone else it seems like a terrible idea now you might point at say Microsoft Surface line for example but the difference is that with each surface Microsoft is taking a huge risk of creating a new category that it then lets its partners expand to tablets with kickstands detachable keyboards and full windows tilty flippy touchscreen all in ones with magical dials those are new categories Microsoft invented and they then let their partners fill the market they have created whether that's going to happen or not as yet to be see the pixel though nothing really knew about that and said Google is simply positioning itself as a direct competitor to the existing products of their partners how could that work Google starts with giving itself preferential treatment like they did with the assistant that's limited to pixel for now next it steals customers away from its old partners and soon those partners will start questioning whether they want to be Google partners in the first place Huawei and the other Chinese manufacturers are already selling most of their phones running an Android version that doesn't have a single Google app on them not even the Play Store Samsung basically indirectly admitted to developing Tizen as a direct reply to Google acquiring Motorola and they're working on a ton of Google replacement services like the gear VR instead of daydream like having Microsoft ABS bundled on their phones that complete directly with the Google services and they have recently bought live the company that made Siri I don't blame them and if pixel turns out to be a serious contender all of these manufacturers will be stuck as second-class citizens and they'll want the backup on even more sure leaving Google's Android is an enormous challenge but the more successful pixel gets the more attractive those plan bees will seem and it's perfectly ties in with the second issue I have with the strategy Google will make a lot of their hardware partners angry and they won't even gain anything substantial right making hardware these days especially for phones is a terrible business software and services now that's where the money's at even Apple the king of smartphone profitability has admitted multiple times that they're starting to focus on selling services such as Apple music because they predict profitability from hardware to decrease in the future well for them it's already decreasing even today none of the major hardware manufacturers other than Apple and Samsung are making a profit because it's really really hard to do and we have every reason to believe that tomorrow will be even worse what happened to pcs a decade ago is happening to phones right now they are turning into a commodity and therefore things like price and scale become more important than features which leads to thin margins companies going bankrupt leaving the market or merging together to survive you can already see the beginning of this as phone prices are being aggressively driven down by Chinese companies so Google turning a profit from hardware seems very unlikely and what really blows my mind is that in the areas that truly matter Google was already winning the race and the pixel phone doesn't really help them in any meaningful way every major tech company says that artificial intelligence is the next big battleground especially Google now I'm not an AI specialist but the consensus for winning this battle seems to be that you just need to feed your AI incredible amounts of data from all types of sources that it can analyze and learn from and guess what Google is probably already better positioned than anyone else to do that their Google their whole business is built on giving you amazing services for free just so they can learn from it I've made a comparison between the Google assistant and Cortana for example you can check that out right here and there's also another one comparing it to Syria it's clear to me that Google is already on the right path to winning this race because of how ubiquitous their services are they don't need to build a phone for the assistant alone they could just make it mandatory on Google Android maybe launch a Google assistant certified program to ensure of quality and call the day it would reach more people and partners would still be less angry at them than if they had you know stolen their customers but if that wasn't bad enough there is a good chance that the pixel won't even be successful because Google is let's face it terrible at hardware now I don't mean they're bad at making hardware specifically they can clearly do that but at everything else it's I think just not in their DNA because every time they have touched Hardware they either made something that flopped or became irrelevant in the grand scale of things let's break their hardware efforts into three groups first the ones they've bought Motorola failed nest and Dropcam originally both leaders of their categor Riis are now both essentially irrelevant they've had programs like the nexus google play edition phones and android one and none of them ever sold on a relevant scale third hardware they have developed on their own like the pixel Chromebook and the pixel see the Google glasses the Nexus player and so on apart from maybe the chromecast a glorified dongle none of these really matter sure for most of these products like the Nexus phones for example sales quantities were never a main goal but there has to be a more to it than just not trying hard enough when a company has a whole graveyard of dead hardware and barely any successful ones I think the entire corporate culture just isn't made for hardware see making and selling hardware requires an entirely different approach than mastering software but it's just as complex those stupid TV and billboard ads are science too you can say Samsung building its own software as a joke because Samsung is terrible at software then you'd be right but to me there is no reason to assume that Google actually becoming a successful hardware company is any less of a joke hey listen to an analogy that I just made up selling a phone requires one-third having a great product one-third having the right marketing to make customers actually want to buy your phone and one third things like sales and supply chain you know having the phone actually reach the customer we techies and depending Google as well are obsessed with the product and like to forget about the second two but drop any of these three and it doesn't work with an outdated product even a company with all the world's channels and mine chair will fall see nokia but equally true without good channels and marketing even the world's best phones won't sell just look at the HTC 10 or the oneplus three great phones and yet they never reach the average consumer what I'm trying to say is that even if Google makes the best phone in the world those other two are still massive mountains to climb as of now the pixel is still only available in five markets and only at a limited number of distributors while Samsung and while we have their phones every corner of the world building up these global channels took Apple and Samsung a decade and billions of dollars and the same goes for convincing consumers that a bitten fruit or a random Korean word is the logo they want to see on their phones of course Google could theoretically do it faster and smarter but given that they have never done either successfully before I mean I can't even buy stupid chromecast here in Hungary I have my doubts that they will and that brings me to my conclusion if Google takes the pixel seriously and wants to be a direct competitor to Samsung and Apple and all the other manufacturers then I really don't understand what they're doing is going to cost them billions and years to get anywhere it's not going to make them a ton of money to begin with at least probably it's going to make their manufacturing partners angry and seriously consider leaving their platform for something else which is going to hinder them in the real race that of becoming an AI powerhouse and all of that is presuming that they will be successful in the first place which I don't think will happen five reasons for why this is a terrible idea but hey this is just my opinion and I am NOT some kind of magical CEO person so there's a very good chance that I am wrong and this is a pretty controversial topic I know and I'm sure you guys and girls have a lot to say about it so let's have a discussion in the comment section below I would like to hear your opinions about this topic and please for five minutes forget about the pixel phone as a device and think of it as a business decision I want to know whether you think this was a good choice for Google or not in either case I'm marching from tech out our I hope you enjoyed this video and if you want to see more thought-provoking videos like this one from the story behind series then be sure to subscribe give this video a thumbs up if you enjoyed it and I will see you in the next one bye bye

Channel: TechAltar

Views: 404,551

Rating: 4.390398 out of 5

Keywords: Pixel, Google, Google Pixel, Pixel phone, Pixel XL, Chromebook, bad, idea, analysis, business, Samsung, Huawei, Apple, Google vs, vs, against, comparison

Id: br-7RDIcG5Q

Length: 11min 2sec (662 seconds)

Published: Sat Oct 29 2016

Reddit Comments

[u/stickypenguin]

I think that the the claim that Google is bad at hardware therefore Google will always be bad at hardware isn't fair. Companies can change their own circumstances with different strategy and different talent. It happens all the time.

I also think providing more competition at the high end is not a bad idea especially when Google is currently masked by Samsung.

Finally, the video mentioned that for a phone to be successful a company needs three things: good product, marketing, and distribution channels. While the Pixel is entering a mature market it is good enough to be compared to the iPhone and S7. Google has marketed the Pixel more than any other hardware product they've ever made. Google has partnered with the largest phone carrier in the US for distribution.

I think they have a chance do do something meaningful at the high end that will increase competition at the high end while allowing companies at the low end to compete with themselves. The only companies they're directly competing with are Samsung and Apple. In my opinion both Samsung and Apple could use some additional competition.

[u/InternetArtisan]

Is there a written version so I don't have to sit through a video?

[u/Metalnakls]

/r/hittablefaces