Latest news with #Shmulik
Business Insider
6 days ago
- Business
- Business Insider
Google has a massive mobile opportunity, and it's partly thanks to Apple
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."
Business Insider
24-05-2025
- Business
- Business Insider
Google has a massive mobile opportunity, and it's partly thanks to Apple
Google's phones, tablets, and, yes, XR glasses are all about to be supercharged by AI. 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."
Forbes
24-04-2025
- Business
- Forbes
Google Earnings Will Be Biggest Q1 Report Yet As Investors Search For Tariff And Recession Impacts
Google parent Alphabet will report first-quarter earnings Thursday afternoon, becoming the first of the trillion-dollar U.S. technology behemoths to report earnings from the first quarter, a period marred by elevated economic uncertainty that could weigh on the advertising-heavy Google. "Underwriting Google might be the closest thing to impossible" with significant macroeconomic and ... More regulatory uncertainty, shrugged one Wall Street analyst. In the report due shortly after 4 p.m. EDT, consensus analyst estimates call for Alphabet to report revenue of $89.2 billion and adjusted earnings per share of $2.01 ($24.8 billion net income), according to FactSet. That equates to 11% top line expansion from Q1 2024 and 6% bottom line growth year-over-year. Alphabet's bread-and-butter Google search unit is expected to generate $50.5 billion in sales, rising 9% annually, and its artificial intelligence heavy Google cloud is forecast to bring in $12.3 billion, growing 28%. Shares of Google rose Thursday ahead of the release, gaining 1%, but have declined 16% year-to-date, slightly worse than the tech-heavy Nasdaq's 13% decline as fears of an economic slowdown tied to President Donald Trump's trade war broadly ate into investor confidence. Investors would 'likely' view even an 'in-line' first quarter as a positive given 'business sentiment has deteriorated' globally, predicted Bank of America analyst Justin Post in a Monday note to clients. But an earnings miss, even if a product of the shaky macroeconomic situation rather than unique to Google, 'could fuel already elevated competitive and regulatory concerns,' the Bank of America analyst continued. Google does not historically provide any specific financial guidance for future periods, but investors will certainly keep a keen eye on any hints for how management expects the complicated macro picture to impact its business. Google is grappling with a 'negative tariff ad spend impact,' according to Post, specifically noting declining spending from Chinese discount retailers Temu and Shein as Trump's more than 100% tariffs on Chinese imports stifle the flow of goods from the country to U.S. consumers. Still, Google has 'relatively less' pressure from the choppy operating environment, according to Post. About 4% to 5% of Google's revenues come from Chinese companies spending on U.S. advertising, according to Bernstein analyst Mark Shmulik, much less than the 7% to 8% exposure from Google's top digital advertising rival, Facebook parent Meta. 'If investing in US tech stocks was difficult right now, underwriting Google might be the closest thing to impossible,' Shmulik wrote Wednesday. Among the massive unknowns swirling around Google are recession concerns, tariff exposure, potential for generative AI to disrupt online search, a 'library of regulatory overhangs' and a 'potential lightning rod for international retaliation' against American entities, explained Shmulik. Among the 'library' of regulatory hurdles facing Google include high-profile monopoly probes from U.S. prosecutors. A federal judge ruled last week Google maintains an illegal monopoly in advertising technology, and the Justice Department argued in an ongoing antitrust case the company should be forced to sell its Chrome web browser. Google is one of the six West Coast tech companies with market values of at least $1 trillion, joined by Apple, Microsoft, Nvidia, Amazon and Meta (those companies are often lumped together with Elon Musk's Tesla to form the 'magnificent seven'). Google was a key part of the massive tech stock rally as generative AI's popularity spiked, as its share price more than doubled from the end of 2022 to 2024. But big tech has stalled on Wall Street as recession fears escalated, as Bloomberg's magnificent seven index has declined about 20% in 2025. Next week, Amazon, Apple, Meta and Microsoft will all report earnings from 2025's first three months. Tesla, the least valuable member of the magnificent seven, shared its Q1 report Tuesday, missing on both profit and revenue forecasts.
