Google has a massive mobile opportunity, and it's partly thanks to Apple

Business Insider

28-05-2025

Google needs to seize this moment. Bank of America analysts this week even called Google's slew of new AI announcements a "Trojan horse" for its device business.
For years, Apple's iOS and Google's Android have battled it out. Apple leads in the US in phone sales, though it still trails Android globally. The two have also gradually converged; iOS has become more customizable, while Android has become cleaner and easier to use. As hardware upgrades have slowed in recent years, the focus has shifted to the smarts inside the device.
That could be a big problem for Apple. Its AI rollouts have proven lackluster with users, while more enticing promised features have been delayed. The company is reportedly trying to rebuild Siri entirely using large language models. Right now, it's still behind Google and OpenAI, and that gap continues to widen.
During Google's I/O conference this week, the search giant bombarded us with new AI features. Perhaps the best example was a particularly grabby demo of Google's "Project Astra" assistant helping someone fix their bike by searching through the bike manual, pulling up a YouTube video, and calling a bike shop to see if certain supplies were in stock.
It was, of course, a highly polished promotional video, but it made Siri look generations behind.
"It has long been the case that the best way to bring products to the consumer market is via devices, and that seems truer than ever," wrote Ben Thompson, analyst and Stratechery author, in an I/O dispatch this week.
"Android is probably going to be the most important canvas for shipping a lot of these capabilities," he added.
Google's golden opportunity
Apple has done a good job of locking users into its ecosystem with iMessage blue bubbles, features like FaceTime, and peripherals like the Apple Watch that require an iPhone to use.
Google's Pixel phone line, meanwhile, remains a rounding error when compared to global smartphone shipments. That's less of a problem when Google has huge partners like Samsung that bring all of its AI features to billions of Android users globally.
While iPhone users will get some of these new features through Google's iOS apps, it's clear that the "universal assistant" the company is building will only see its full potential on Android. Perhaps this could finally get iOS users to make the switch.
"We're seeing diminishing returns on a hardware upgrade cycle, which means we're now really focused on the software upgrade cycle," Bernstein senior analyst Mark Shmulik told Business Insider.
Without major changes by Apple, Shmulik said he sees the gap in capabilities between Android and iOS only widening.
"If it widens to the point where someone with an iPhone says, 'Well my phone can't do that,' does it finally cause that switching event from what everyone has always considered this incredible lock-in from Apple?" Shmulik said.
Beyond smartphones
Internally, Google has been preparing for this moment.
The company merged its Pixel, Chrome, and Android teams last year to capitalize on the AI opportunity.
"We are going to be very fast-moving to not miss this opportunity," Google's Android chief Sameer Samat told BI at last year's I/O. "It's a once-in-a-generation moment to reinvent what phones can do. We are going to seize that moment."
A year on, Google appears to be doing just that. Much of what the company demoed this week is either rolling out to devices imminently or in the coming weeks.
Google still faces the challenge that its relationships with partners like Samsung have come with the express promise that Google won't give its home-grown devices preferential treatment. So, if Google decides to double down on its Pixel phones at the expense of its partners, it could step into a business land mine.
Of course, Google needs to think about more than smartphones. Its renewed bet on XR glasses is a bet on what might be the next-generation computing platform. Meta is already selling its own augmented reality glasses, and Apple is now doubling down on its efforts to get its own smart glasses out by the end of 2026, Bloomberg reported.
Google this week demoed glasses that have a visual overlay to instantly provide information to wearers, which Meta's glasses lack and Apple's first version will reportedly also not have.
The success of Meta's glasses so far is no doubt encouraging news for Google, as a new era of AI devices is ushered in. Now it's poised to get ahead by leveraging its AI chops, and Apple might give it the exact opening it's waited more than a decade for.
"I don't know about an open goal," said Shmulik of Apple, "but it does feel like they've earned themselves a penalty kick."