Google better organizes our world –and sells us back the experience

This post originally appeared on my colleague Jeremiah Owyang’s Web Strategy Blog

By Chris Silva and Jeremiah Owyang, Industry Analysts at Altimeter Group 

Last year’s over hyped skydiving was replaced by down to earth by grounded product enhancements. 

We’re live from the Google IO conference in SF with 6,000 developers, press, and media in San Francisco’s Moscone event center. We noticed a lot of Glass Explorer units (which surprisingly was barely mentioned in the keynote) we’ve purchased two to test, and will write up a detailed post on them after we’ve done a thorough test.

Today’s Google’s announcements were a wreck; a series of products flipping in front of you, rather than a well laid out showroom.  To make sense of this patchwork set of announcements from a fragmented company, we’ve identified some top level trends:

Key Trends at Google I/O for the Executive:

Products enhanced and interconnected –no major new products announced.

• Google can coordinate across all of your screens, making multi-screen easier showing its ability to tie together all of your experiences across the Google-system.
• Ironically, Google did not mention Google Glass. We believe this is because it was overhyped last year, failed to meet production deadlines this year.
• Google+ had several enhancements including a new 3 column layout akin to Flipboard, deeper content with flippable content cards, Hangout now extended to multiple browsers, Google+ profiles have improved sign on capability–but no adoption numbers were touted in this flailing social network.

Google is virtually replicating planet earth, but “improving” the quality.

• Google maps is becoming a *Virtual World*.  3D experience with our uploaded photos. With virtual goggles like Occulus Rift you can walk through this virtual world, experiencing our world in just a few mouse clicks.
• The company announced the ability to use more granular location to allow better targeting of mobile users with apps and offers, finally bringing the inherently local capabilities to mobile that we’ve been awaiting.
• Retailers and hospitality should take note, Google maps now integrates photos of your stores from the inside. Internal decor matters to the search process.

Google knows what and who you love as we trade convenience for our data.

• Google announced that they could identify highlights of top photos in your albums, they were able to identify important photos based on facial recognition of your family, grouping these as important.  Google knows who your family is –and what’s important to your heart.
• Google is becoming more like a media company, music streaming (Google All Access,) photo editing, magazine-ing of the G+ stream. “Google makes the world better with data.” Google+ becomes like a magazine,
• Speech recognition across the desktop and mobile and bringing personal context to all of their services, doing things like making everyone’s view into maps personal, with their important landmarks highlighted.

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Unsaid contract: Google better organizes our world –and sells us back the experience

The big takeaway is Google is trying to let consumers experience as much of your brand before they buy it, for examples a search user can experience the inside of your store, the reviews, the photos and find the fastest way there –before ever leaving their chair.  As such, Google or their advertisers, may influence the purchase decision.

In mobile, It’s about the services, not the devices: While leading with mobile products last year to get people into their sandbox. In social the story focused on rich media differentiating the Google+ network and it became clear that social-first products like Hangouts and Google+ sign=in will make a broader play across more Google and non-Google products. , across data and search – whether maps or analytics – Google wants to up the ante in the tools it offers developers and, in turn, the companies and brands they empower.

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The Pithy Bottom Lines:

• For consumers, if you’ve bought into the Google ecosystem, expect the tools and products to get better but know you’re the product.
• For brands: If you want to play in Google’s sandbox, you’ll ultimately need to pay.
• For Google Competitors: As Google has entered media, any industry is up for grabs; they may be your competitor and just not have announced it yet.

The Phone Doesn’t Matter In #FacebookPhone

We all gathered amidst the rain and clouds at Facebook HQ, 1 Hacker Way, Menlo Park, CA to see what would be unveiled. A new flagship Android phone, tailored toward Facebook users? A new branch of the Android OS? A groundbreaking partnership?

Turns out it’s an application – a launcher to bring Facebook to the top of the Android OS on the devices it will run on and, in addition, some purpose-built hardware that will showcase the new Facebook Home integrated launcher and applications. Some will certainly label this a letdown, they were expecting more disruption, but here’s why this is the smartest move for Facebook.

• Facebook wants deeper engagement, more frequency of interaction from users. When you experience Facebook Home in person, you see just how front-of-mind the experience is. You’re device essentially becomes a billboard for interacting with Facebook when idle. Providing this at-your-fingertips ability to interact with the social network will drive more frequent and likely longer engagement with Facebook. Putting messaging at the core of its #home product. Integrating Facebook messaging as the layer through which SMS and Facebook messages are interacted with is a key example of driving more behaviors to the social network.
• The second half of the smartphone buyers in the US market are not looking for high-end devices. The first 50% of smartphone users in the US were buying iPhones and other top-tier devices. Many of these devices are largely used for business. The second 50% of the market, who are starting to come online now are younger, more price sensitive and gravitate toward mobile devices - specifically smartphones – for the social experience. Facebook’s announcement provides them with hardware that’s within their range, and centered on what they care about, and the apps extend to others who’ve already made an investment, its partnership with HTC and AT&T drive non smartphone users into the fold with a custom-built experience that matters to them because it’s based on social, and specifically, Facebook.
• Facebook wants to deliver an immersive experience.  Facebook does not need to create a fork of the Android OS or build a phone from scratch to do this. That said, to create an immersive experience, they did need to focus on Android to start because it offers a much deeper level of integration. “We wanted this to feel like system software, not an app you run,” according to Zuckerberg. The open advantage of Android in this announcement is not to be underestimated. What was announced today is not – at least yet – possible on any other platform. The key to Android’s differentiation may lie in others making use of it to provide new, novel experiences. This is a best case example of what Google intended when making Android open source, and other platforms should take notice.

Why doesn’t the phone matter? It’s certainly a nice piece of hardware in the look and feel department and Facebook’s integration of system notifications alongside those from Facebook apps (not available if you install the Home app on your Galaxy SIII or other compatible device) is a nice example of tight integration but it’s a minor footnote to the story. Getting pre-briefed about the solution, I’d say the Facebook team spent about 60% of their time on the software with the remaining 40% on the device due only to my slew of questions about it.

“Our phones are designed around apps, not people.” – Mark Zuckerberg

In the end, mobile advancements for brands, social networks and imperative tools for us to get our jobs done are device agnostic. One of the questions I asked the Facebook team was why they were launching an app and bundled hardware at the same time and not staggering the launch. Their answer came in one word, “scale.”

“A great phone may sell only 10 or 20 million units, even if we did a great job with a phone… we’d still only be reaching a portion of the mobile community.” – Mark Zuckerberg

They’re also really excited to launch Home on tablets, devices with higher interaction times to begin with. Facebook will be launching Home for tablets later in the year. Lastly, using an app versus a new devicew or OS they’re able to iterate much more quickly, according to the VP of Engineering for the product.

Any mobile initiative that brands, internal mobile strategiests or others want to make waves have to go as broad as possible, that means multiple OSes, multiple form factors and multiple devices. We’re now buying mobile as tools and experience that make our lives better, not as pieces of hardware.

One Phone’s Intro Shows Signs Of Change In Mobile

I made the trip down to Samsung’s Galaxy S4 launch in New York City last week expecting the usual, some demos, lots of stats and an end to speculation on what came next in the chaebol’s smartphone lineup. What I came away with, instead, was an understanding of just how much of a threat to the Google Android ecosystem Samsung is, why the home is the next target for mobile, why OS matters less and less and why that’s all goodness. There’s plenty of coverage of the strangeness and potential offensiveness of the broadway-themed launch, so I’ll leave that to the reams of existing press – it was quite a sight to behold – and focus on the implications I see.

A Broadway Show… About A Phone. Image CC License Chris Silva, 2013

Sure it was a bit much to sit through for an hour, and my mind did wander, which is why it wasn’t until after the event that something struck me. This was a launch of a flagship Android smartphone and the word Android was barely uttered once, and in fact only appeared on the last slide shown as we were filing out to clamor for a glimpse of the smartphone from afar. Samsung in its launch showcased software capabilities in software and ecosystem features to paint a picture of Samsung as a go-to provider for all things mobile and cutting edge.

• S-Translate: Anyone who’s used the Google Translate app has marveled at the ability to speak or type a phrase in one’s native tongue and read or hear the translated version in one of 64 languages. It’s a great application of cloud-based intelligence for local tasks and in my experience came in quite handy when needing to translate to Costa Rican landlords that my water heater was on fire, but I digress. Translate is a core offering of Google’s mobile apps and well executed on Android. S-Translate from Samsung just introduced the capability as if it’s brand new, and invented by Samsung. 
• S-Beam: Not a new one from the S4 launch, but a nice branding of otherwise overly-techy NFC capabilities that allow the sharing of photos, contacts, web page links and more by bringing two devices into close proximity. Once again, Samsung has chosen to re-brand an existing and relatively common smartphone feature, marketing it as a unique, Samsung-only offering. This has been offered on Google’s Nexus devices (one of its more recent one made by Samsung) since the 2010 launch of the Nexus S.
• S-Health and Home Sync: Announced initially at CES, Samsung is pushing the value of a family of connected devices which use the smartphone as the primary means of data processing – in the case of S-Health the S-band tracks body motion and sleep metrics to allow users to participate in the growing trend of quantified self. Fitbit, Nike and others have long ago trod this ground, but Samsung is marketing an integrated experience with its own hardware. Similarly, with the advent of Home Sync, media sharing that begins on the smartphone can tie into other Samsung devices in the home like SmartTVs or other sets hooked up to their Home Sync appliance. Today’s news of the company working on a Smart Watch continues this expansion. Beyond simply selling more handsets, Samsung is looking to tie together its many touchpoints in our lives to increase tighten user engagement. It’s a smart play for a company with an existing presence in many rooms in many homes that it’s looking to grow.

What does this mean for Google? It’s great news in that shipments of Android devices are being greatly increased quarter over quarter in part due to Samsung’s marketing machine. At the same time, Samsung’s brand becomes intrinsically linked with the features and capabilites above, none of which are truly unique. Bad news for Google and other Android handset providers who just took a backseat to Samsung who’s frankly doing a better job at marketing these capabilities in a way that resonates with buyers.  This diminishes other partners’ ability to market similar features. Many of these tools and features are rooted in the Android OS and available to any device running it. Google is in a tough spot being in the hardware game as well as having to play the impartial role of ecosystem owner but needs to clearly delineate what’s special about Android as an alternative OS vs. what’s specific to any given handset. My gut tells me that Google will try and re-distribute the marketing “juice” in the ecosystem so Android stays a powerhouse in its own right with a rotating spotlight on various players, not least of which will be Motorola.

What about implications for the mobile as a whole? I was asked post-event whether I thought that Samsung would ultimately abandon Android and go its own route for a smartphone OS. I can argue both sides of this, on one hand Samsung would stand to lose a great deal of marketing and user-base momentum by switching to a new OS for its smartphones. It’s widely recognized that, as of the Galaxy S4 Launch, Samsung’s approach to the market is looking at lot more like Apple’s iPhone strategy – incremental innovation to a willing customer base over massive re-designs – a new OS would throw a spanner in those works. On the other hand if Samsung continues to distance itself from Android branding when debuting products and features, the OS becomes less relevant.

In the end, the mobile OS will matter less and less, eclipsed by what I can do with my device and across how many other pieces of kit that I already own or will buy. I can imagine a future where a phone is truly marketed for its capabilities, not the OS it runs. We’re already seeing some major brands in the space toy with porting apps from one OS to another, if this trend holds, we’ll be buying our smartphones on hardware and features  regardless of what they run in the kernel. look at the iPod, a truly revolutionary device that has, in large part, become a feature of a whole new slate of items we can’t seem to get enough of. Expand this device-turned-use-case model to something that connects to everything in your home and it’s plain to see that winners in this market in 5 years will look a lot different than they do today. Maybe it’s Samsung, maybe it’s another vendor as-yet still not in the market.

What’s your take on Samsung? Flash in the pan or smartphone powerhouse about to steal the crown in this market – at least for a little while?

Why Context Will Make Or Break Mobile

All of us in the mobile space like to conjecture about who ultimately wins the day in mobile, who gets to be number one, who follows and who is left battling for the third place spot. Most all of this conjecture is based around hardware specs and software features, but in reality, the winner will be the player that masters context. Nokia has just announced its entry to this game.

I sat in a crowded room this week and listened to Nokia CEO, Stephen Elop announce Here, the new “location cloud” from Nokia. Unfortunate cloud-branding aside (mapping is, after all, something that almost by definition requires a server-based back-end) Here is a strong, strategic step for the Finnish company. Known mostly for its hardware and, of late, for its struggles to gain market share in the smartphone space against iOS and Android in partnership with Microsoft, Here brings a level of context to location-based services that has been under-served to-date.

Stephen Elop, Nokia CEO, at Nokia Here Event In San Francisco (image courtesy The Verge)

Here is the issue I see, however. Nokia is and has for a long time been a hardware company; they’ve done great things with software (though they’ve mostly gained popularity in other parts of the world) but its future is still tied to selling more Lumia handsets. Here has the potential to make this happen, if the marketing of the service and its unique features – unified place discovery through City Lens with high-quality mapping – are sold in such a way so as to drive consumers to the platform over other choices from Apple and Google, especially when the latter has made some pretty big waves with Google Now.

Context matters so much because it allows our devices to approach the nirvana state of being truly “smart” phones. At present, most of our devices’ smarts are orchestrated by the user from disparate apps and tasks. The mere fact that Google Now made big news by taking information that exists on the phone (where I am and where my next calendar meeting is) and automated the presentation of “leave now for your next meeting,” shows just how far we have to go to make our devices truly smart. In the future, acting as virtual wallets, compasses and lenses through which we view the world and the people in it, our smartphones will differentiate themselves by how quickly they can assemble data on the fly, even collect data autonomously, to automate our lives. This is true context, and the participants in this dialogue will be us, people in our social graph and the brands whose marketing we encounter daily. Whichever firm can master this process – and it doesn’t necessarily need to be a mobile handset maker, but it like is – will be the winner of our mobile hearts and minds, at least for a time.

Winning with context means creating great, purpose-built tools for your hardware platform or operating system, but it also means courting developers with open standards to use your device, lastly, it relies on a strong network of developers creating tools that users want. At present, not one, single entity owns all three, most just have one of the aforementioned traits. So, it’s anyone’s guess who will be leading the pack even two years from today in mobile. Who’s your pick to win?

I, For One, Welcome Our Robot Overlords

The news is abuzz with research firm Strategy Analytics’ call that the Samsung Galaxy SIII has unseated the iPhone as the world’s most popular smartphone. While this is a great headline and one that I’m sure myself and my peers will be fielding calls about, what’s most interesting to me is the proof point that it represents. The fact that Apple could be unseated from its throne atop all things mobile was hard for many to imagine but, if we look at the numbers, it was bound to happen. The story isn’t just about the most popular device, though, these things are cyclical and are likely to change again in Q4. The story is that we’re starting to change in our preferences on what we expect from our mobile computers, and it’s a sign we’re maturing as users.

Samsung, Apple, Innovation And Fishwrap

In the wake of the Samsung/Apple trial verdict the news is crawling with hyperbole about how disruptive the verdict will be to the mobile OS ecosystem, specifically Android’s momentum. Nothing new in the world of tech reporting, of course. In reality, life is long and the sea changes predicted rarely amount to more than surface ripples. Will Android and its ecosystem be affected by the recent pro-Apple verdict in its battle against Samsung? Sure, but I don’t think the results will be nearly as dire as predicted.

Android Won’t Emerge Unscathed, Nor Mortally Wounded. Image Credit Gizmodo, via Sociable

Here’s why this isn’t bad news, per se:

Google Says, “It’s Our Turn” In Mobile

I spent this morning at the Google I/O developer conference and, aside from people literally skydiving into the event – the news was largely tech-related and heavily mobile.

Today Google kicked off its I/O developer conference in San Francisco

Google made announcements of its new Nexus Tablet, the JellyBean aka Android 4.1 OS and home media sharing features of its new Nexus Q device. Here is what stands out:

• Android grows up – It was no accident that the Android portion of the keynote opened on the idea of smoothness. Android’s latest iteration, Jelly Bean was introduced with a lot of talk of both smoothness and responsiveness improvements. Google went to the extreme of illustrating this with video of super slow-motion shots of screen animations using a RED camera, shooting at 300fps. And yes, Jelly Bean looked smooth. Google also took the chance to trot out some user and activation stats, showing that 12 Android devices are being activated every second, with 1M new devices coming online every day, up from 400K per day last year. That’s growth!

• Android gives iOS a run for its money with Jelly Bean – The first major upgrade here is Google Now, in addition to providing voice-activated search, the results of which are provided as constantly updating “cards” that will show information from sports scores to travel time to a destination persistently,  looks like a mashup of Wolfram Alpha-powered Siri on iOS and constantly updated Android widgets. Siri may carry on a conversation with you, but Google Now learns patterns and will proactively notify you if your current meeting – based on calendar information – is running too long to let you be on time for your next, based on your established transit patterns.
• Tablets, Take Two (?) – Google unveiled its Nexus 7 tablet, a 7 inch, slim tablet, with quad core processor and 16 core GPU. It was demonstrated showing blazing fast rendering on gaming demos on stage, it also has a strong media presence, with the existing Google Music and Books service tied in alongside newly-launched Google Magazines. Google will be selling the tablet direct via the Google Play store (similarly to the Galaxy Nexus) starting at $199. With its media centric use case and low cost price point, this is the Amazon Kindle Fire killer that will let Google re-take the #2 spot in tablets, and raise Android tablet market share.
• Google Gets Ecosystems – The launch of the Nexus Q device, wow factor aside, had me and many in the crowd hemming and hawing over it’s $299 price tag. The unified media device, powered by Android, that allows for social sharing of video and music, is designed to live next to the TV and allow streaming video with group control when friends and family with Android devices are present. It seems odd that there’s no immediate tie-in to Google TV and many would argue – myself among them – that Google is not yet a media player so why launch… a media player? This is a move to show some serious commitment from Google of selling Android devices as an holistic ecosystem, across three screens: smartphone, tablet and television.

Some big announcements and a lot packed into their keynote, there was more to be said on the social front, which my colleague Jeremiah Owyang liveblooged here on Google+ naturally. What does it all mean for brands trying to capitalize on mobile and enterprises wondering what becomes of Android?

• Brands need to pay attention to Google’s media play. At present there are three players in the mobile media space, goliath Amazon with its small fleet of devices, music and movie catalog Apple with all that resides in iTunes and Google. Until today, I’d have argued that the latter was an also-ran and that reputation won’t change over night, however, their investment in three screens and amping up content relationships to cover print, movies and music will be intruiging to users if the new tablet and Nexus Q catch on. Google has a lot of work to do, and will need media partners to make its ecosystem “real,” but not paying attention for brands and media companies is no longer an option. If nothing else, Android remains a volume play and their media market execution is improving.
• Enterprises wondering when will Android standardize, there’s hope – We’ve seen a ton of fragmentation in the Android OS space, and we will continue to. Google is choosing to go direct with hardware to ensure that the latest, greatest software makes it to market on purpose-built devices. Sound familiar? It may have made iOS more palatable in the enterprise, even if initial versions were not work-ready, but Android has a lot of ground to cover. I see Google’s direct-to-market push at present as a temporary injunction, an infusion of good, working technology in a market that’s been plagued by the absence of both. If you can’t beat the carriers and device manufacturers, show them the way, that’s what I see happening here. The good news? This guerrilla tactic will smooth out the many bumps in the road to Android homogeneity.
• Get ready for another wave – Both carriers and electronics manufactuers will begin to see intense pull from users looking to get the newest features of JellyBean demonstrated today. On the carrier side, spiffs and other programs to push sub-par Android devices will begin to yield significant return rates as more of the general population begins to get educated on what Android can be. Be smart and align with Google and its hardware partners to offer the best, retention rates and lower churn will thank you. Enterprises? There’s going to be another wave of Android to get familiar with and work with management vendors to support, however, as homogeneity begins to take hold, I expect to see a slowing of the rapid OS refresh rate and an evening out of user device preference toward later-generation OS versions. Hang in there!

As I often like to remind clients and readers of my research, we’ve only just begun when it comes to mobile. Counting Google out of the game due to the multiple party quagmire that has been Android to-date is premature and naive. Expect this ecosystem to grow and stabilize and, as a result, many mobile power dynamics to shift. It’s going to continue to be a great ride!

Googorola, Consumated

Last summer, I took a look at the then-newly-announced combination of what Google and Motorola Mobility would mean for the mobile industry. Today, as the acquisition closed, I’d like to revisit some of the points to see where we go from here.

Google Has Officially Consummated It’s Motorola Mobility Deal Today

At the time the merger was announced, I predicted three things would happen, let’s see how I did. 

488M Active, Mobile Users, $0 For New Hoodies

448M new mobile users added in March, 2012, quite an impressive number, however, just over a week from its planned IPO, Facebook has made another amendment to its S-1 filing with the SEC and the concerns gathering around this version? Mobile. How to keep the CEO in hautest hooded coture if the company isn’t seeing any revenue from its mobile users? On the hoodie front, I’m with Shel Israel and others that hoodie-gate is a sideshow (if that) but mobile is a real concern. Here’s what Facebook had to say on the topic this go-round:

“We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven… if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.”

Stronger language than last time, for sure.

Where’s My Billion?

Over the past week, I’ve been getting a lot of questions about what makes an app worth $1 Billion. I’m not sure I have the final answer, but I’ve got some thoughts on how Instagram got there.

The Polaroid Land Camera logo evokes emotion, nostalgia even in the majority of users who've never even seen one!

The heart of most of the questions I get is whether there’s a firm, quantifiable link between popularity, users and, ultimately, valuation.  I don’t think it’s that simple. I do think that, for the same reason iOS cultivated a more fervently devoted following than Android when it’s losing the feature-for-feature battle. Talking about Instagram vs others in adjunct spaces I think the equation is more complex and involves less tangible strengths like emotion and overall “feel.”My main thoughts on how this maps to Instagram and its wildly successful exit come down to three things: