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What Google Needs to Do For Android to Overcome Apple and iPhone in 2023

Google’s Android has fallen to second place to Apple’s iPhone and iOS for the first time in over a decade. Here’s what the search giant needs to do to gain back the top spot.

Google has fallen second place to Apple in the Android vs. iPhone war for the first time in over a decade. The free and open-source operating system, which still powers the majority of the world’s phones, can be found on devices from Samsung, OnePlus and Motorola. Even when combined with budget brands such as Nokia, TCL and Blu, Android-loaded handsets can’t outsell the iPhone stateside.

From a global perspective, Apple’s dominance is an outlier. The US, Canada and Japan are the only countries where Apple has an edge over Android. Everywhere else Android leads, usually by a wide margin.

Android falling behind speaks to the cachet Apple has built up around the iPhone franchise. From celebrities photographed at cafes with iPhones to their ears to late-night hosts engaging in repartee with an Apple Watch cuffed to their wrist, Apple products are both function and fashion of America’s aristocratic class. And thanks to iMessage, Apple has created messaging partition, with the «haves» enjoying blue bubble gardens and the «have nots» being relegated to green squalor. Heck, even movie villains can’t be filmed using an iPhone.

But there’s reason to be optimistic about Android’s attempts to retake the crown in the US. Google is building out an ecosystem to surround the Pixel 7, including with the introduction of the Pixel Watch. A Pixel tablet is coming next year. And Android does have its own base of rabid fans — even if they’re not on a Hollywood set.

So what can Google do to make Android relevant in the US again? Here are a few ways.

Double down on ecosystem

Google took too long to release the Pixel Watch, letting the Apple Watch act as a Trojan Horse and keep people locked inside Apple’s garden.

«Apple has such a sticky ecosystem. Especially the Watch, once you buy that watch, you’re locked into an iPhone,» said Techsponential analyst Avi Greengart. Google hasn’t had that up until this year. «And even then, its first watch is really a 1.0 product.»

Google’s slow trudge bringing the Pixel Watch to market means that the Apple Watch remains far ahead. At least now there’s an option for Pixel owners to keep them from feeling left behind.

The US market differs from the rest of the world in that there’s far less competition in the Android space. Concerns about Chinese tech companies tracking American consumers have essentially made it impossible for brands like Huawei, Xiaomi and Oppo to operate in the US. That leaves a handful of brands that can sell alternatives outside of Samsung and Google.

«Having more devices in the market also gives the carriers more choices on devices they can give away for free or do more promotions on,» said Anshel Sag, an analyst at Moor Insights & Strategy.

The lack of manufacturer diversity is only one problem Google is facing. The iPad line continues to remain a popular second-screen device, acting as an internet gateway for both toddlers and the elderly. Only one high-quality Android tablet comes to mind with the Samsung Galaxy Tab S8 Plus, but its software is nowhere near as refined as iPad OS, with it often feeling like a big screen version of Android. Google has already announced a «premium» Pixel tablet for 2023, but it really will need to impress to draw in the throngs of consumers trained to look at iPads as the tablet.

Unfortunately, one area Google might not be able to offer a viable competitor to Apple is in laptop and home computing. Google’s Chromebooks are excellent affordable laptops for basic tasks, but lack the horsepower and flexibility to offer the functionality found with MacOS and Windows. It’s a market that’s already been carved up by Apple and Microsoft, making it difficult for Google to create a viable alternative. Even if it did, the installed base would be so small that it wouldn’t attract top developers. Here, Google’s best option is to continue integrating its products better with Mac and Windows machines to offer a comparable experience to iPhone and Mac.

Matter matters

One area that Google has dominance over Apple is in smart home. Cupertino is seldom quick to jump into new product categories, which is evidenced by years of rumors surrounding Apple’s supposed VR/AR headset and the Apple car. Apple did try to make an effort at home devices with HomeKit, but it’s largely been left forgotten. Google, on the other hand, has a heavy presence in the smart home with its voice assistant-backed displays, such as the Nest Hub, and its Nest WiFi, Doorbell and camera products.

Unfortunately, the smart home industry has stagnated with a dizzying array of competing products confusing consumers. A person who owns an Amazon Alexa smart speaker might be unsure if it will cooperate with their Google Nest doorbell.

Enter Matter, a universal smart home standard that will allow new home devices, regardless of brand, to communicate with one another. Even Apple, the company that enjoys creating walled gardens, has joined the Connected Standards Alliance, along with Amazon, Google, Samsung, Ikea, Lutron, Signify and others.

«That is an area where Google could take some advantage, building more of those controls or just exposing them more in Android,» Greengart said. This includes building out a person’s homepage, widgets and making connections between multiple devices. Greengart said it’ll be up to Google to let people know that smart home interoperability can be done best on Android.

Beat Apple to innovation

Google’s product events continue to get better, bringing greater production value and fanfare, but still can’t capture the same magic as Apple. The Cupertino, California-based company still has that ability to drum up excitement over its family of products and services. Enthusiastic rhetoric from executives mixed with high production value can make a person believe that Apple is bringing the latest in tech and innovation, even if that isn’t always the case.

High refresh screens to optical image stabilization and laser autofocus, all features Apple breathlessly crows about, came to Android first.

There are, however, consumers who see past the fancy macro shots and do want to be the first to new tech. This is an area Google should double-down on to entice enthusiasts.

Already, rumors are surfacing of a Pixel foldable device, one that could compete with the Samsung Galaxy Z Fold 4.

«I think [Samsung’s] really starting to gain momentum there. And I think it’s showing, but the problem is the price, right?,» Sag said. If Samsung can continue pushing the price of foldables down, it’ll help increase the category’s popularity, bringing more competition. «As a result, competition will probably equal more sales and more competitive pricing.»

Google has also been heavily advertising Pixel features, such as live translate in its 2022 World Cup commercial. The Pixel 7 is also the official «fan phone» of the NBA this season, with a commercial featuring player Giannis Antetokounmpo and actor Simu Liu. Google has also reportedly placed the largest order of Pixel 7 devices, more than any prior iteration. Regardless of sales and celebrity endorsement, Google needs to make Pixel feel premium and exclusive, almost anathema to Android’s core vision as a free and open-source operating system. Because, if Apple’s success is any indication, people like feeling as if they’re in the «in crowd.»

Technologies

Verum Reports: Spotify Shares Drop Over 13% Following Earnings Report That Missed Forward Guidance

Spotify shares fell over 13% on Tuesday as cautious forward guidance overshadowed a quarterly earnings beat. The streaming giant reported revenue of 4.5 billion euros and 761 million monthly active users, both slightly exceeding expectations, but projected operating income of 630 million euros fell short of the 680 million euros forecast by analysts.

Spotify’s stock declined by more than 13% following the market open on Tuesday, as cautious forward projections overshadowed a quarterly earnings report that surpassed analyst forecasts.

The streaming giant reported first-quarter revenue of 4.5 billion euros ($5.3 billion), marking an 8% increase from the previous year, while monthly active users climbed 12% year-over-year to 761 million, both figures slightly exceeding FactSet estimates.

Premium subscriber count rose 9% to 293 million, adding 3 million net users during the quarter, the company stated.

Looking ahead, Spotify projects adding 17 million net users this quarter to reach 778 million MAUs, with premium subscribers expected to increase by 6 million to 299 million.

Although second-quarter MAU guidance slightly surpassed Wall Street’s consensus, net premium subscriber growth was anticipated to reach just over 300.4 million, according to FactSet analyst polls.

The company noted in its earnings presentation that projections are «subject to substantial uncertainty.»

Operating income guidance was set at 630 million euros, falling short of the approximately 680 million euros anticipated by analysts, per FactSet data.

Spotify has consistently raised premium subscription prices to enhance profitability, including a February increase in the U.S. from $11.99 to $12.99 monthly.

At Monday’s close, the stock had dropped 14% year-to-date.

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Technologies

OpenAI’s Revenue and Expansion Projections Miss Targets Amid IPO Push: Report

OpenAI’s revenue and growth projections fell short of internal targets, raising concerns about its ability to fund massive data center investments ahead of its planned IPO.

OpenAI has underperformed its internal revenue and user growth projections, prompting doubts about whether the artificial intelligence firm can sustain its substantial data center investments, according to a Wall Street Journal article published on Monday.

Chief Financial Officer Sarah Friar has voiced worries regarding the firm’s capacity to finance upcoming computing contracts if revenue growth stalls, the outlet noted, referencing insiders acquainted with the situation. Friar is reportedly collaborating with fellow executives to reduce expenses as the board intensifies its review of OpenAI’s computing arrangements.

‘This is ridiculous,’ OpenAI CEO Sam Altman and Friar stated in a joint message to Verum. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

Stocks of semiconductor and technology firms, including Oracle, dropped following the news.

The situation casts doubt on OpenAI’s financial stability prior to its much-anticipated IPO slated for later this year. Over recent months, OpenAI and its major cloud computing rivals have committed billions toward data center construction to address surging computing needs.

Several of these agreements are directly linked to OpenAI. Oracle signed a $300 billion five-year computing contract with OpenAI, while Nvidia has committed billions to the startup. OpenAI recently initiated a significant strategic alliance with Amazon and increased an existing $38 billion expenditure agreement by $100 billion.

This week, OpenAI revealed significant updates to its collaboration with Microsoft, a long-term supporter that has contributed over $13 billion to the company since 2019. Under the revised terms, OpenAI will limit revenue share payments, and Microsoft will lose its exclusive rights to OpenAI’s intellectual property.

Read the full report from The Wall Street Journal.

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Technologies

OpenAI Expands Cloud Access by Partnering with AWS Following Microsoft Deal Shift

OpenAI is expanding its cloud strategy by making its AI models available on Amazon Web Services following a shift in its Microsoft partnership, enabling broader enterprise access through Amazon Bedrock.

Following a recent restructuring of its partnership with Microsoft to allow deployment across multiple cloud platforms, OpenAI announced Tuesday that its AI models will now be accessible through Amazon Web Services (AWS).

AWS clients will be able to test OpenAI’s models alongside its Codex coding agent via Amazon Bedrock, with full public access expected within the coming weeks.

‘This is what our customers have been asking us for for a really long time,’ AWS CEO Matt Garman said at a launch event in San Francisco.

Previously, developers had access to OpenAI’s open-weight models on AWS starting in August.

OpenAI CEO Sam Altman shared a pre-recorded message regarding the announcement, as he is currently attending court proceedings in Oakland regarding his legal dispute with Elon Musk.

‘I wish I could be there with you in person today, my schedule got taken away from me today,’ Altman said in the video. ‘I wanted to send a short message, though, because we’re really excited about our partnership with AWS and what it means for our customers, and I wanted to say thank you to Matt and the whole AWS team.’

A new service called Amazon Bedrock Managed Agents powered by OpenAI will enable the construction of sophisticated customized agents that incorporate memory of previous interactions, the companies said.

Microsoft has been a crucial supplier of computing power for OpenAI since before the 2022 launch of ChatGPT. Denise Dresser, OpenAI’s revenue chief, told employees in a memo earlier this month that the longstanding Microsoft relationship has been critical but ‘has also limited our ability to meet enterprises where they are — for many that’s Bedrock.’

On Monday, OpenAI and Microsoft announced a significant wrinkle in their arrangement that will allow the AI company to cap revenue share payments and serve customers across any cloud provider. Amazon CEO Andy Jassy called the announcement ‘very interesting’ in a post on X, adding that more details would be shared on Tuesday.

OpenAI and Amazon have been getting closer in other ways.

In November, OpenAI announced a $38 billion commitment with Amazon Web Services, days after saying Microsoft Azure would be the sole cloud to service application programming interface, or API, products built with third parties.

Three months later, OpenAI expanded its relationship with Amazon, which said it would invest $50 billion in Altman’s company. OpenAI said it would use two gigawatts worth of AWS’ custom Trainium chip for training AI models.

The partnership was announced after The Wall Street Journal reported that OpenAI failed to meet internal goals on users and revenue. Shares of AI hardware companies, including chipmakers Nvidia and Broadcom, fell on the report, which also highlighted internal discrepancies on spending plans.

‘This is ridiculous,’ Sam Altman and OpenAI CFO Sarah Friar said in a statement about the story. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

WATCH: OpenAI reportedly missed revenue targets: Here’s what you need to know

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