Here’s your daily tech digest, by way of the DGiT Daily newsletter, for Tuesday, April 30, 2019!
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1. Google’s Pixel pressure
Google’s parent Alphabet reported earnings yesterday and while Google is doing very, very well, growth wasn’t as strong as predicted.
A brief look at the numbers before we talk Pixel, just because it’s amazing how extraordinary numbers can become so ordinary:
- Alphabet reported a net income aka profit of $6.6 billion on $36.33 billion in revenue for the first three months of 2019.
- That’s 17% more revenue when compared to the same first three months in 2018.
- The company now has close to or around 100k staff.
- But the signs are that Google’s advertising business can’t keep growing as fast as it has, reaching a saturation point.
- That leaves growth for Google to be found elsewhere.
- And on that point, the company’s “Other Bets,” which include ideas and companies like self-driving Waymo and Project Loon internet balloons, are expensive. Those efforts lost $868 million, or nearly $300m a month. Betting on big ideas costs money.
- So what about Google’s hardware, from the Google Home to the Pixel, and so on?
Google’s hardware division:
- First, it emerged that Pixel smartphones aren’t selling well, despite the launch of the Pixel 3.
- Alphabet CFO Ruth Porat noted the decline on the company’s earnings call.
- Sales were already miserly.
- Sundar Pichai, Google’s CEO, was on the defensive about its hardware investments, talking up the Google Home smart speaker as a “market leader” and that “our commitment is very strong”.
- More detail was given by CFO Porat, “hardware results reflect lower Year-on-Year sales of Pixel reflecting in part heavy promotional activity industry-wide given some of the recent pressures in the premium smartphone market.”
What does that mean exactly?
- I’m not sure. Two “reflections” in one sentence is difficult to parse.
- It looks like Google is saying: expensive smartphones aren’t selling as rapidly as in the past – even Apple can’t sell as many iPhones and no longer reports details.
- Last night revealed Samsung made a lot less in Q1 too, although that was expected, and the Samsung Galaxy S10 sold well enough through marketing efforts (The Verge).
- So, competitors have spent big on marketing, which has squeezed out the Pixel line.
- And that would echo what we know: the flagship market is the toughest it ever has been. High-end phones from a year or two ago last longer, still perform well, people aren’t upgrading as rapidly because new phones cost more than ever, and new devices don’t pack enough must-have features.
- You can listen in to the entire earnings call or just tap here for the moment at 7:51 when Porat mentions the Pixel issues, and see what you can decipher.
- We’ve argued in the past that Google probably doesn’t even want market share from its Pixel line. Google just can’t be this bad at selling smartphones.
- Pixels seem to exist as a platform for Google software, including its Pixel camera, rather than truly excellent hardware. They’re still expensive, they’re still not widely sold – only available on one carrier in the US.
- It’s an expensive flagship that seems more like a hobby for Google.
- The fix isn’t impossible: better hardware, better value, but only if Google wants to do so.
- That might all change at Google I/O this year. Google confirmed last night it will make a hardware announcement.
- Finally, we might see something different, and potentially aggressive?
- Most expect the Google Pixel 3a and 3a XL: more budget-friendly devices with the same excellent camera.
- Will that be enough?
2. “I spent a week with a $17 phone – here’s what I learned” (Android Authority).
3. The once-hot cute robotics startup Anki is shutting down after raising more than $200 million (Recode).
4. Vodafone found hidden backdoors in Huawei equipment back in 2011 and 2012, no evidence of data compromise though (Bloomberg).
5. OnePlus ad in NYT references that U2/Apple iTunes thing for some reason (AA).
6. Tesla is finding out what it’s like when China gets a little angry (Business Insider).
7. “Apple, enough with the slow-ass chargers” (Gizmodo).
8. The cameras YouTubers love: Video creators are using everything from Sony’s A7 III to RED’s Monstro 8K (Engadget).
9. Tame white Beluga whale with harness could be Russian weapon, say Norwegian experts (The Guardian).
10. Enough with the ‘Actually, electric cars pollute more’ bullsh-t already (Jalopnik).
11. “What felt like a useless piece of advice until you actually tried it?” (r/askreddit). (This blew my mind: “If you have a clogged nose, doing 8-10 pushups will temporarily clear it up.”)
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