(Bloomberg) -- With its hardware event on Tuesday, Alphabet Inc.’s Google is trying to outshine Apple’s annual iPhone launch — and is letting longtime executive Rick Osterloh take center stage.
Osterloh, the former president of Motorola who joined Google in 2016, will helm the first major product launch after the company this year unified under his leadership the teams developing hardware and the Android operating system. The reorganization expanded Osterloh’s influence in the company and signaled that Google intends to compete in hardware for the long term.
In a sign of a more aggressive push into consumer devices, Google moved up its annual flagship Pixel smartphone launch to August from October, preempting the next Apple Inc. iPhone debut and seizing attention during a typically quiet period for the industry.
“For the first time, I feel Alphabet is taking its hardware and the smartphone side pretty seriously,” said Mandeep Singh, an analyst with Bloomberg Intelligence. “That is a reflection of Rick’s leadership and what he has done.”
Google has invested heavily in its Pixel line, including designing its own chip, sponsoring NBA playoffs games and handing devices to superstar players like Giannis Antetokounmpo. And yet, it continues to trail Apple at the high end of the market. Android partner Samsung Electronics Co. has locked up much of the rest of that segment in the US, leaving little room for insurgents, even ones as influential as Google.
Tough competition hasn’t slowed the rise of Osterloh’s star within Google, and handing him unilateral control of the company’s consumer offerings — at the expense of Hiroshi Lockheimer, who previously oversaw Android — may be a move to ensure Google can capitalize on the current push to monetize AI through devices.
“The scope of Osterloh’s role is considerable. It not only applies to Android but also other key platforms such as Chrome,” said CCS Insight Chief Analyst Ben Wood. “It could signal the realization by Google it needs a more cohesive approach across platforms, particularly as the AI battle intensifies.”
The latest wave of generative artificial intelligence features has the potential to revive consumer interest in smartphones and prompt them to upgrade their devices more regularly, Singh said. Samsung has positioned its Galaxy lineup as an AI-first offering this year, and it reported that its Galaxy S24 series notched double-digit sales growth over its predecessor. Apple has also signaled it intends to sell iPhones on the strength of a suite of new features it calls Apple Intelligence.
Google’s Pixel line, which dates as far back as Osterloh’s tenure with the company, has stood out due to its embrace of AI in its camera software. It’s delivered groundbreaking advancements like Night Sight, a photography mode that’s been emulated across the mobile industry, including by Apple. And Google’s development of a Tensor mobile chip, designed in house, gives the company a differentiating feature against other Android contenders.
By holding its hardware showcase a month ahead of the iPhone maker’s largest annual event, Google is “frontrunning Apple and also making a statement that we are likely way ahead of what Apple will show for iPhone 16 at least,” Singh said. Google has at least a six-month head start on Apple, which has invested less in AI over the years than some of its Big Tech peers, he added.
Google’s strategy — tying together the development of hardware, software and services — carries echoes of Apple’s successful approach to designing devices. Yet, as Osterloh seeks to capitalize on the opportunity presented by AI, he faces a perennial challenge for Google: bringing the fight to Apple without threatening key relationships with hardware giants such as Xiaomi Corp. that rely on the Android operating system.
Android President Sameer Samat said in an interview that his team maintains strict information-sharing boundaries to ensure its projects with the Pixel team and partners such as Samsung don’t bleed into one another. Yet the team’s position under Osterloh’s stewardship will smooth the path of Google’s AI from labs to Android partners, Samat said.
“It allows us to take some of our AI innovation and actually bring it to more of the ecosystem more quickly,” he added. “It’s all been about trying to move faster around our AI endeavor and improving the consumer experience.”
Shortly after starting in his new role, Osterloh traveled to South Korea to meet his Samsung counterpart, TM Roh, to ensure the partnership and collaboration between the two companies continues smoothly. He also attended Samsung’s Unpacked product launch event in July, promising to bring Google’s AI-powered experiences “to all Android devices.”
Due to the complexity of switching from Apple to Android devices, any gains Google makes in hardware are likely to come at the expense of Android partners, which could be a helpful force in and of itself, Singh said.
It will pressure those brands to “move faster,” Singh said. “And overall I think it will just strengthen Google’s ecosystem.”
--With assistance from Mark Gurman and Davey Alba.
©2024 Bloomberg L.P.