On Wednesday, Alphabet introduced its latest Pixel 11 smartphone series, which prominently features the most advanced version of its Gemini AI system to date. This announcement comes just weeks ahead of Apple's anticipated launch of an enhanced Siri, which will utilize Google's AI technology. The new Pixel lineup comprises the Pixel 11, Pixel 11 Pro, Pixel 11 Pro XL, and Pixel 11 Pro Fold. Central to Google's hardware strategy is the Gemini Intelligence, an array of AI functionalities designed to comprehend user activities and facilitate actions across various applications. For instance, Gemini Intelligence can aggregate information from messages, calendars, and maps, offering suggestions or automating tasks like checking availability, comparing travel options, or initiating restaurant reservations. The tech giant is also enhancing AI capabilities that operate within the phone's ecosystem, minimizing the need for users to access a separate chatbot.
Rick Osterloh, Google's head of devices, shared his thoughts with CNBC, emphasizing that AI has the potential to transform the way users engage with smartphones. He noted that, "For the last 10 to 15 years, not a lot has changed in how you use laptops and mobile phones. But we think that's about to change dramatically."
Osterloh portrayed Gemini Intelligence as "a completely new way to interact with a computer," equipped with functionalities that enable users not only to gather information but also to accomplish tasks. This launch positions Google in direct competition with Apple, one of its significant clients for AI technology, as Apple plans to realign Siri using Google's Gemini models with similar ambitions of personalized understanding and multitasking across apps. When asked if the Pixel provides Google an opportunity to display its technology before iPhone users get a taste, Osterloh clarified that the experiences will differ significantly. "I think it's clear that Pixel and iPhone are taking very different paths," he stated. "It's always been part of Pixel's strategy to lead with innovative technologies, particularly with Gemini and AI." He highlighted features like scam detection and advanced voice transcription as examples of unique functionalities that showcase Google's offering.
Both companies now face the challenge of whether these advanced AI features will be enough to motivate consumers to upgrade their phones. While Osterloh acknowledged that AI isn't presently the primary driver for device upgrades, it has risen significantly in importance among consumers in recent years.
According to research from Counterpoint, AI ranks roughly sixth or seventh in terms of reasons consumers upgrade their smartphones, though it has gained traction in recent surveys as both Gemini and Apple's AI capabilities advance. Tarun Pathak, a research director at Counterpoint, suggested that convincing consumers to act on their growing interest will hinge on compelling use cases and increased awareness. He noted that Apple's AI enhancements could spur iPhone upgrades, citing that Apple already holds the largest share of generative AI-capable smartphones in consumers' hands.
In the long run, Google envisions Gemini playing a crucial role in shaping users' interactions with their devices. "We believe its significance will increase, and it may someday become the primary method for using phones, laptops, and other devices,” Osterloh added.
Additionally, Google faces external pressures, as a global shortage of memory components is driving up hardware costs. Osterloh confirmed to CNBC, “There’s quite clearly a shortage of memory, both RAM and flash memory.” This situation is prompting consumer electronics companies to elevate their pricing structures, which Google also anticipates will affect its products. "In the near term, everyone will need to raise their prices," he stated, confirming that Google will follow suit like other industry players.
With the launch of the new Pixel, Google is keen to test the impact of a more autonomous AI assistant on user behavior. In contrast, Apple is preparing to make a similar move, leveraging a much larger existing consumer base already equipped with generative AI-capable smartphones.
