As usual, the keynote address at Alphabet/Google's (GOOGL) annual I/O conference was packed with new service announcements and saw the term "machine learning" used (roughly estimating) a few hundred times. Here's a run-down of notable announcements:
- Several updates were unveiled for Google Search. Among them: The ability to discover/save podcasts and obtain more in-depth news coverage within search results, and the inclusion of an augmented reality camera mode that can place digital versions of objects a user just searched for within a phone's camera view. That last feature could be useful for Google Shopping ads.
- A slew of updates were also announced for Google Assistant. Assistant will now be able to run directly on Android devices -- this will both improve performance and let users access it without an Internet connection. Assistant will also be able to provide responses that take user info into account (for example, a person's birthday or restaurant reservations), and users can issue a string of commands without saying "Hey, Google" before each one. And a feature called Duplex on the Web will speed the process of doing things such as booking travel reservations and ordering movie tickets on web sites (presumably, Google will get a revenue cut).
- Other new AI-powered features were also shown off. A service called Live Caption (also capable of running on-device) can automatically caption video and audio content from many sources, and Google's Smart Reply feature (found in Gmail and its messaging app) will run within third-party messaging apps and be able to recommend actions that involve launching another app. Google also highlighted its efforts to use machine learning to do things such as provide flood warnings and detect lung cancer earlier than many trained radiologists are able to.
- A slew of new security and privacy efforts were unveiled. Google plans to provide one-tap access (via profile photos) to account and privacy controls through its most popular services, and says the next version of Android (known as Android Q) will have nearly 50 new security and privacy features, including ones providing better control of location data and ad settings. Security and privacy have of course been major selling points for Apple (AAPL) .
- The Google Home speaker family is being rebranded and merged with Nest's smart home hardware lineup, with the Google Home becoming known as the Nest Home. The product line is also getting a new device: The $229 Nest Hub Max, a smart speaker with a 10-inch display that both supports video calls and can use face-detection to personalize the information and recommendations it shows. Separately, Google is cutting the price of its Nest Hub speaker, which has a 7-inch display and no camera, by $20 to $129.
- Google launched two mid-range Pixel phones: The $399, 5.6-inch, Pixel 3A, and the $479, 6-inch, Pixel 3A XL. The phones feature a slower Qualcomm (QCOM) Snapdragon processor than the one inside of the Pixel 3 and 3 XL, which start, respectively, at $799 and $899. The new phones don't support wireless charging, however, and they only have one front camera rather than two. But the phones do come with the advanced camera features sported by Google's flagship Pixels, and also effectively run on the same software.
- Both the Pixel 3 and 3A will be sold by T-Mobile US (TMUS) , Sprint (S) and US Cellular (USM) , in addition to existing Pixel 3 seller Verizon (VZ) . Google also says the Pixel 3A will be available in the 13 countries where the Pixel 3 is currently sold.
Key takeaways for investors:
- Improving the usefulness and versatility of Google Search, still by far Alphabet's biggest profit engine, remains a major priority for Google.
- Slowly but steadily, Google is coming up with new ways to monetize Assistant. In addition to developing Duplex on the Web, Google has worked with retail partners to let users order items via Assistant, and it recently began showing full search results (replete with search ads) in response to certain Assistant queries on mobile devices.
- Though by no means the only tech giant to be investing heavily in AI/machine learning, Google's consumer-facing, AI-powered services arguably remain best-in-class. And this in turn is proving to be a valuable competitive strength for Search, Assistant, Google Photos, YouTube and much else.
- Following a Q1 in which Pixel sales fell annually, Google is getting more aggressive about growing its smartphone business. Though Apple isn't threatened much by the launch of the Pixel 3A and expanded carrier distribution for the Pixel line, given the iPhone's customer loyalty rates, Samsung and other Android OEMs can't be pleased with the moves. Of course, it's not as if there's another major mobile operating system that they can adopt in response.
