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Google steps up integration of AI into its hardware

devices

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Prices remain flat amid tariff uncertainties

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Google's AI push has not led to market share gains so far

By Kenrick Cai

Aug 20 (Reuters) - Alphabet's Google

introduced on Wednesday a new lineup of Pixel smartphones and

gadgets, intensifying its efforts to embed artificial

intelligence across a wide ecosystem of products.

The products were launched at the annual "Made by Google"

event held in New York that diverged from its typical format to

emphasize mainstream consumer appeal over technical details.

Talk show host Jimmy Fallon, the Jonas Brothers and other

celebrities featured heavily across the presentation, as they

helped demonstrate real-world applications of Google's AI

integrations into the hardware. As for the hardware itself, the

upgrades were comparatively modest.

"There has been a lot of hype about (AI in phones) and frankly a

lot of broken promises too, but Gemini is the real deal," said

Rick Osterloh, Google's senior vice president of devices and

services, referring to Google's AI chatbot and model.

At its developer conference in June, iPhone maker Apple ( AAPL )

toned down its AI promises a year after it failed to deliver AI

upgrades to key products such as Siri. Apple ( AAPL ) is expected to

unveil its new line of iPhones this autumn.

While Google's hardware upgrades were modest compared with its

bold refresh in 2024, the company maintained its forward

progress on its stated ambition to develop a universal AI

assistant.

"We've got the best models, we've got the best AI assistant,

and it means this can just unlock so much helpfulness on your

phone," Osterloh said.

New AI features rolling out with the Pixel 10 lineup include

a "coach" in the camera app to help users take better pictures

and an assistant that displays relevant information without a

user's explicit request, such as showing a flight confirmation

email when they call an airline.

Employees also demoed integrations of AI features earlier

unveiled at Google's developer conference in May, such as a

real-time language translation function for phone calls.

The exteriors of the phones remain largely the same, though

Google added a telephoto lens on the base model to bring it in

line with the cameras on its pricier units.

Prices, starting at $799 for the base unit and $1,799 for the

foldable model, remained flat despite concerns earlier this year

that some smartphones could experience drastic price hikes due

to U.S. tariffs.

"A lot of the stuff they showed today would probably run

almost exactly the same way on last year's hardware. Their point

is it's not about just the hardware anymore," said Bob

O'Donnell, chief analyst at Technalysis Research.

MARKET SHARE WOES

Google's annual hardware event has traditionally served as a

way for the company to show off to device makers and software

developers the potential of Android, a key strategic component

to battling competition from Apple ( AAPL ), which has its own operating

system for its iPhones.

Though Google develops the Android operating system

underlying more than 80% of smartphones worldwide, its Pixel

line generates only a fraction of the sales of other firms

selling Android-powered phones, such as Samsung and

Xiaomi ( XIACF ).

Analysts told Reuters this year's event appeared to be an

attempt by Google to broaden the appeal of Pixel beyond its

traditional base.

"Last year there was such a jump in the hardware, from a

design and feature perspective," said Carolina Milanesi, an

analyst at Creative Strategies. "This feels more like a big push

from a marketing perspective."

Google's AI push has not yet translated to a material

improvement in market share: for the second quarter, Google held

1.1% of the worldwide smartphone market, up from 0.9% one year

ago, according to IDC.

In the United States, Pixel's biggest market in terms of

shipments, the share slid to 4.3% from 4.5% in that same time

period, according to IDC.

Google has so far limited its focus to the high-end market.

Nearly three-quarters of Pixel shipments occurred in the United

States, Japan and UK, according to research firm IDC.

On Wednesday, the company announced it would begin selling

the Pixel devices in Mexico for the first time. Google's limited

geographical presence with Pixel has inhibited its ability to

amass market share, analysts told Reuters.

"I hope this is the start of expanding their channel

presence," Milanesi said. "The opportunity of the addressable

market they can reach is still what is kind of holding Google

back."

The Pixel 10, as well as the souped-up Pixel 10 Pro and

Pixel 10 Pro XL, will be available later this month, while the

Pixel 10 Pro Fold is slated to ship in October.

All the Pixel phones are equipped with Google's latest

mobile processor, Tensor G5, and for the first time, feature a

magnetic charging technology called Pixelsnap that is

reminiscent of the MagSafe functionality on Apple's ( AAPL ) iPhones.

Google unveiled a series of Pixelsnap chargers, cases and phone

stands to accompany the launch.

Google also announced new versions of its smartwatch, the

Pixel Watch 4, and its cheaper Pixel Buds 2a wireless earbuds,

though it did not update the Pixel Buds Pro 2 besides announcing

a new color and upcoming device-specific software upgrades.