This week, Google introduced the Pixel 9 series of smartphones, but the real goal of this project is not to strengthen the company’s position as a manufacturer of consumer electronics, but to expand sales of products based on artificial intelligence, writes the Wall Street Journal.
Image source: store.google.com
Google Pixel phones are developed internally and receive high ratings from reviewers, but they generate little revenue for the company. Last year and the first half of this year, these devices occupied less than 1% of the global smartphone market, Counterpoint Research analysts calculated. But they open the door for Google to delve deeper into the field of generative AI. Therefore, at the presentation, the company talked more about the Google Pixel software than about the phones themselves.
Some of their features will not be limited to just the Pixel family, as Google is looking to extend its AI tools to devices from other manufacturers running Android. In the near future, the AI chatbot Gemini Live will be widely available, which will appear on all compatible phones of English-speaking users, and then it will debut on iOS. But Gemini Live and some other AI features are only available to subscribers of the Gemini Advanced plan, which costs $20 per month, although it is offered free for a year to owners of the older Pixel 9 Pro, XL and Fold phones.
This, apparently, is Google’s business model: consumers are already accustomed to the fact that the company’s voice assistant is free. This isn’t the first time the company has started offering premium subscriptions to what was originally free, such as ad-free YouTube. YouTube premium subscriptions alone brought in $11.9 billion last year, or 20% more than revenue from the sale of all devices. And the average annual growth of the YouTube Premium segment over the past four years was 52% versus 16% for the device sales segment.
Monetizing AI for mobile devices is no easy task. First, Google had to fight for a place in the sun with the alliance of Microsoft and OpenAI, and now another major player in the form of Apple Intelligence is preparing to enter the market. So while Google remains a modest player in the devices space, its core products such as search, Gmail and Android are in reality the world’s largest distribution network for new technologies, including generative AI. That’s why the company announced new Pixel phones this week – a month before the presentation of the new iPhones. And so Google has emphasized several times that its AI products are ready to go to market, while Apple’s Intelligence suite will be rolled out gradually.