Company / division: Alphabet
Google is reportedly getting ready to release a new mobile payment service explicitly for the Indian market, with localizations intended to integrate with payment mechanisms unique to that country. The name is Tez, which means fast in Hindi, and it’s just the latest example of big tech companies making significant local adaptations to their products, services, and business models to fit into India, along with Amazon’s forthcoming first party smartphones (which I’m assured are launching soon), Apple’s local manufacturing, and Facebook’s work with local wireless operators and others. Other than its local manufacturing and fairly standard language support, though, Apple has largely resisted localization in India, unlike China, where it’s made far larger concessions to local customs and platforms. Others are arguably willing to bend their usual rules more to be successful there than Apple is, despite Tim Cook’s frequent remarks about how important the market is. That may need to change if Apple is really to break through, though there continue to be big additional barriers to Apple building a big business there (notably income levels).
This isn’t huge news, and I think people who follow the transportation industry and autonomous driving technology closely would probably know this already, but it’s worth noting these comments from Alphabet subsidiary Waymo’s CEO on the timing of various applications of self-driving technology. He said at an event today that he sees trucking and ride sharing being the first applications for autonomy, and that either one might be the first to be commercialized at this point. That’s very much in keeping with the conclusions I’ve reached and what I’ve heard from various other industry players – the fact that trucking largely involves long distances and highways dramatically simplifies the driving task there and enables platooning of vehicles, all of which means it has a much clearer near-term return on the investment in autonomous technology than most other applications. Ride sharing, meanwhile, typically involves cars which have very high utilization rates versus private vehicles, and is often limited to a well defined geographic area, making the training and gathering of mapping data a more manageable task too. Of course, we still don’t know quite what the business model for either of these applications will be – whether a licensing of the technology, a direct participation or revenue sharing agreement for the ride sharing market, or something else.
Variety has a quick run-down of some new data from App Annie about the usage of various mobile video apps in the twelve months to July 2017, and it shows YouTube to be dominant in that category, with 80% of total time spent for the top 10 apps. Also notable is that YouTube grossed more than Hulu on the strength of its YouTube Red subscription service, suggesting that it may be doing better than widely perceived, though that may also reflect YouTube’s role as a more mobile-centric platform while many users may pay for their Hulu subscriptions through a computer or TV box. Also worth noting is that over half the top ten video apps come from non-traditional TV brands – only HBO, Starz, CBS, and Showtime hit the top ten, while the rest are all digital-native brands. Also notable is the fact that all of those traditional TV apps have pursued the same successful strategy of opening up their entire libraries for digital rather than trying to create a digital service that’s complementary to traditional TV – that’s the winning strategy in this space, and Disney should take note as it readies an ESPN direct to consumer service for early next year.
This article is a bit of an oddity – the Wall Street Journal reporting on the Wall Street Journal – but the news itself is important: Google is relaxing the policy that currently penalizes sites like the Journal which no longer allow Google searchers to view an article linked from search results for free. Since the Journal instituted that change, it’s seen traffic from Google (which in turn is likely a big chunk of total traffic) drop enormously, because sites that don’t participate in Google’s “first click free” program are penalized in search results. This is yet another sign of a softening at Google towards news organizations, which have been increasingly critical of its (and Facebook’s) power over them, though Google still seems to be months if not a year behind Facebook in coming around and making serious concessions.
★ Google Formally Appeals EU Ruling on Shopping Search (Sep 11, 2017)
Google’s Android One project for emerging markets was launched in 2014, and focused on countries in the Indian subcontinent and other parts of Asia. But it’s appeared to be struggling, with little recent positive news from vendors supporting it in those countries. In addition, at its I/O developer conference this year Google announced a project internally called Android Go, which is focused on optimizing Android for low-cost devices and therefore seemed to be in somewhat the same vein. But the funny thing about Android One is that’s it’s been morphing somewhat from a project for the low end of the Android market to one more targeted at the mid market. There have been several Android One phones through Sharp in Japan since mid-2016, and now Xiaomi is announcing a device. which seems at least in part targeted at India.
The most interesting thing about Xiaomi as a partner is the fact that it’s always majored on its proprietary UI – MIUI – as a differentiator for its devices, and it’s arguably that the fairly locked-down Android One was intended at least in part as a response to Android OEMs’ customizations, so this is certainly a departure for Xiaomi. As with the Japanese phones, though, this one is also targeted at the mid-market, selling for a little over $200, with 80% of handsets sold in India below $200. So it’s a poor fit for the original focus of the Android One project, which is arguably now being taken over by the Android Go initiative, but indicative of what Android One is evolving into. The big question is whether the device will actually sell, given that a Xiaomi phone without MIUI is a tougher sell and there are plenty of other cheaper Android phones in the countries the companies are targeting with this one. There’s certainly no guarantee Android One does any better in India at $200 plus than it did at $100.
Nest Unveils Cheaper, Slightly Less Capable Thermostat E (Aug 31, 2017)
Nest unveiled its first new thermostat product in two years today in the form of the Thermostat E, a cheaper ($169 vs $249) and slightly less capable alternative to its core product line. The functionality is very similar, with only a slight reduction in compatibility with HVAC systems (Nest says 85% versus 95%) and one other minor missing feature relative to its core product. But the new thermostat is also redesigned, with a much lighter and arguably less distinctive look, apparently intended to blend in better to light colored walls and rooms rather than sticking out as an intentional piece of striking design like its first product in the category. Though the price of the original thermostat has certainly been a sticking point for some, especially those who need several units – the reality is that price is only one of many factors holding back the smart home. Far more important in many ways is the fact that most people find installing and managing these things intimidating and therefore managed services rather than DIY solutions are going to be the key for the vast majority of users, and Nest really isn’t doing anything in that direction. Meanwhile, Nest’s slow pace of new product introductions continues: it has three product lines, none of them newer than 2014, and its core thermostat and Protect products haven’t been updated in two years (see this image for an overview of its product launch history). The camera products have received most of the attention in the last couple of years, but there’s been no new organic product category from Nest since 2013. (See the Smart Home is Stuck narrative linked below for more context on all this)
Google today announced ARCore, an equivalent to Apple’s ARKit tools for developers to create AR experiences on Android phones. Importantly, it’s not tied to the latest version of the Android operating system but rather is being implemented on a device-by-device basis, with Google’s own Pixel and Samsung’s Galaxy S8 the first devices to support it, with the latter running Nougat rather than Oreo. There are two ways to look at this announcement, given the timing: on the one hand, it looks like a response to ARKit and the massive positive buzz that’s received since it was announced in June; on the other, it’s a natural outgrowth of the work Google’s done with its much higher end Tango AR framework in the last few years, and that’s certainly how Google’s pitching it. I think the reality given the speed with which this has been released is that this was something Google was working on pre-ARKit but has accelerated in light of the ARKit launch.
Its blog post headline is “Augmented reality at Android scale” and you can read that one of two ways: on the one hand, as a counterpoint to ARKit, which runs at the somewhat smaller iOS scale, but on the other as an acknowledgement that – interesting though Tango is as a platform – it was never going to achieve true Android scale. The rollout plans here are a little vague – Google hopes its “preview” of ARCore will hit 100 million devices sometime this winter, which is likely a fraction of the iOS devices that will support ARKit by that time, but there’s potential for broad rollout of this platform to most recent premium Android devices over the next couple of years. That’s likely short of true Android scale (2 billion plus phones) but would likely hit the devices where it’s most relevant, which are those that compete more directly with the iPhone, though Apple will enjoy a year or two of significantly greater adoption before Android starts to catch up.
At this point, it’s hard to see Tango as anything other than a time-consuming and expensive failure in its own right, but it’s clearly allowed Google to learn a lot which can now be applied to ARCore and therefore be much more useful and widely available. Between Apple and Google’s launches, it’s clearer than ever that smartphone AR will be by far the largest chunk of the overall AR/VR spectrum, and we should see some really interesting implementations over the next few months.