FT – Google shows real focus on AI even as it unveils new hardware

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For a company that claims to have discovered a newfound passion for making smartphones and other gadgets, Google has a strange way of showing it.

On Tuesday, at a “Made by Google” event billed as a coming-out party for its new hardware division, the internet search company served up something rather different: a vision of a post-hardware world in which the intelligence in the machines, rather than the machines themselves, is the centre of attention.

The paradox was spelt out by Sundar Pichai, chief executive of the internet business. He dwelt exclusively on a new personal digital assistant — called, simply, Assistant — that will live inside the new Pixel phone, as well as in a “smart speaker” for the home modelled on Amazon’s Echo.

As the product of the company’s longstanding investment in artificial intelligence, Mr Pichai boasted, Assistant would draw on deep technology: unrivalled speech and image recognition, language translation and text-to-speech conversion, as well as the ability to tap into Google’s “knowledge graph” of information to find direct answers to many different questions.

“There’s a new game in town for Google: search is important, but AI is the future,” said Brian Blau, an analyst at Gartner.

When introducing the company’s new hardware, on the other hand, Mr Pichai was less enthusiastic: the intention was mainly just “to get Assistant into the hands of users, which is what today is about,” he said.

Promoting gadgets primarily as the vessels for a superior intelligence will not be easy. Unlike Apple’s near-obsession with the high-gloss sheen of its handsets or the images produced by its latest iPhone camera, the intangible qualities of Google’s Assistant do not immediately stand out.

“It’s a hard thing to market,” says Julie Ask, senior analyst at Forrester Research. Due to the difficulty of teaching computers to understand language, she says, the Google software, like Apple’s Siri and Amazon’s Alexa, will seem rudimentary at first.

Mr Pichai promised that the machine-learning technology behind the Assistant will allow it to adapt to each user and become increasingly useful, until it is “a personal Google”. But unless the company can come up with some compelling uses for the technology in its rudimentary form, it will not be able to attract the usage — and capture the data — needed to train the system, says Ms Ask.

Foremost among the new devices revealed on Tuesday was the Pixel, a smartphone positioned to compete with the iPhone and Samsung’s top-of-the-range handsets. Starting at $649, it also has the price to match.

Google made phones briefly after buying Motorola, hoping to undercut the iPhone by bringing innovative technology to lower priced devices. That failed and with Pixel it is planting a foot in the iPhone camp. The strategy marks the end of a six-year experiment in which Google worked closely with hardware makers to release co-branded handsets under the Nexus name.

Google’s incursion into the smartphone business is likely to reverberate through the Android world. Its software is used in four of every five smartphones sold, putting the internet company squarely in competition with handset makers it has treated as partners.

“Companies like Samsung and LG and HTC don’t have their own operating system; it’s been a problem for years,” says Ms Ask. “But it’s becoming more acute. It’s going to get harder and harder to make money selling hardware.”

The launch of the Pixel could prompt Samsung to focus on its own operating system, Tizen, analysts say, though other handset makers have no alternative but to stick with Android. HTC, for instance, is assembling the Pixel, relegating the Taiwan-based company to the contract manufacturing status it held before attempting to turn itself into a branded consumer tech group.

The Assistant initially will be exclusive to Google’s own phone before eventually being released more widely. But the Pixel has little to distinguish it and is not likely to sell in large volumes, says Mr Blau. That is despite partnerships with a range of carriers and retailers, including Verizon in the US and EE in the UK, and the promise of a hefty marketing budget.

The phone is one of the first to meet the specifications needed to run Google’s new virtual reality technology, called Daydream. A VR headset to work with the phone, priced at $79, was among the gadgets revealed on Tuesday.

But cheaper Android phones from other manufacturers also capable of running Google’s VR are soon expected to undercut Pixel — expanding the market for Daydream but robbing Google’s new phone of one early advantage.

Meanwhile, Google’s new smart speaker, called Home, is designed to take the Assistant into a form factor pioneered by Amazon’s Echo.

It is “a pretty interesting smart system tacked on to Google’s database of knowledge,” says Mr Blau. Amazon may have been first, but according to Mr Blau and other analysts, Google’s search technology and deeper investment in machine learning should give it an edge — a threat that has prompted a flurry of activity at Amazon as it tries to capitalise on its early lead.

Google’s Pixel and other hardware products are best seen as part of an expanding family of gadgets designed to give Assistant wider reach and entrench Google’s technology ecosystem, says Mr Blau.

Other initiatives disclosed on Tuesday further that goal. These include a set of developer tools, due to be released in December, so that other companies can produce voice-driven “applications” that work with Assistant — a move that echoes Apple’s opening of its Siri technology.

Google also promised that from early next year it would let other hardware makers embed Assistant in their own devices.

As Google’s devices proliferate and more developers are drawn to its voice-activated systems, it will be able to collect more data about its users and make its smart assistant increasingly useful and personalised.

At that point, as Mr Blau says: “It won’t be so easy to leave.”

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