Google Just Opened Up a New Revenue Stream for Google Assistant
Alphabet/Google (GOOGL) just announced a Google Assistant update for Android that brings a few new features. Among them: More images/visuals within Assistant replies, more comprehensive answers for subjects such as events and stock quotes and -- notably -- full Google search results for those queries where Assistant feels it make sense to show a list of relevant websites.
Those search results will include both organic results and (in some cases) Google Search ads. With Google Search still by far Alphabet's biggest profit engine, Assistant's latest revamp, which one can imagine also arriving on Google's iOS app in time, could drive a fair amount of mobile ad revenue once fully rolled out.
Google is also looking to monetize Assistant activity by taking a revenue cut on voice commerce transactions involving retail partners such as Walmart (WMT) and Target (TGT) . Though playing voice ads in response to Assistant queries is probably a non-starter, fears that voice search activity will badly cannibalize Google's traditional search ad business look overblown -- particularly given how much voice search activity will take place on phones, tablets and other devices with screens.
What to Make of Amazon's Reported Plans for an AirPods Rival
Bloomberg reports that Amazon.com (AMZN) is prepping a pair of AirPods-like wireless headphones that support its Alexa voice assistant and could launch as soon as the second half of this year. Like Apple's (AAPL) AirPods, the headphones will require pairing with a phone and come with a charging case.
Unless they're a lot cheaper (and perhaps even then), convincing iPhone owners to buy the headphones instead of AirPods is likely to be a tough sell. Apple has tightly integrated its AirPods, which have become a runaway hit and were just refreshed, with iPhones and other hardware so that they do things such as instantly pair with Apple devices when taken out of a case and automatically start playing audio once placed in a user's ears. And while many consumers prefer having Amazon's Alexa rather than Apple's Siri in their living room or kitchen, the fact that Siri is deeply integrated with iOS and Apple's services, as well as a growing number of third-party iOS apps, can make it more useful on a pair of headphones connected to an iPhone.
On Android, Amazon's headphones might have more of an opening, since no AirPods alternative supporting Google Assistant has truly taken off thus far. But over the long run, given that Google Assistant is integrated with Android, Google's apps and services and third-party apps, Amazon's Alexa headphones could face an uphill battle here as well.Nonetheless, there's still some logic to Amazon trying its hand in this space. For all its success within the home, Alexa's limited mobile presence remains a strategic handicap in the voice assistant wars. If a pair of wireless earbuds just moderately improve Alexa's smartphone position and drive some incremental usage of other Amazon services, that's not a terrible outcome.
Samsung's Outlook Matters More than its Weak First-Quarter ResultsA week after warning that its Q1 profits would fall short of expectations due to soft display panel sales and tumbling memory chip prices, Samsung ( SSNLF) has forecast it will report a Q1 operating profit of about 6.2 trillion won ($5.5 billion). That represents a roughly 60% drop from year-ago levels, and -- though it's possible some analyst estimates weren't updated following last week's warning -- below a FactSet analyst consensus of 7.1 trillion won ($6.2 billion).
- Samsung is Real Money's Stock of the Day
- Samsung Slips as Profits Forecast Falls to Lowest Level in Years
Revenue is expected to be down 13% annually to about 52 trillion won ($45.7 billion); that's officially below a consensus of 53.2 trillion won ($46.8 billion). Nonetheless, just as it wasn't badly stung by last week's warning, Samsung's stock fell just fractionally overnight in Seoul, and various tech rivals, peers and suppliers are trading higher today amid moderate gains for the Nasdaq.
Clearly, a weak Q1 was priced into both Samsung's shares, as well as those of many of the companies that compete or do business with it. Just ask memory rival Micron (MU) , which surged a couple weeks ago after issuing light guidance.
Samsung's Q2 and full-year outlooks, which the company will share when its Q1 report arrives on April 30, are much more important at this point than its Q1 numbers. In particular, markets will pay close attention to whether Samsung, like Micron and a slew of others, expects conditions to meaningfully improve during the second half of the year.
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