Analysis: AI is How Google Wins (Premium)

Don't let Google's seemingly bland 2017 device lineup announcement from this past week undercut what's really happening here. Google has, in fact, laid out its most serious devices challenge yet. And its competitors, especially Apple and Amazon, have no effective response.

I know. That sounds a tad hyperbolic. But hear me out.

The value of any digital device is tied to its usefulness. That is, the latest iPhone may or may not be pretty, opinions vary. But the core reason people purchase an iPhone is because of what it can do. The unlimited nature of its capabilities is somewhat breathtaking when you stop to think about it.

But the realm of what's possible hasn't really expanded in a while. As Google noted during its event this past week, phones ... well, they're sort of all the same. The same camera, the same processor, the same capabilities. The differences between each device have become minor.

It wasn't always this way. When Apple announced the first iPhone in 2007, it completely reset our notion of what a phone could be. Yes, there were many, many limitations, it was the first version. But it was eye-opening.

In 2008, when Apple belatedly opened up iPhone to an app store, the bar was raised yet again. No longer were we limited to the then-still-amazing set of features that were available on the device itself. Now, the iPhone---and, soon, Android and the smartphone market generally---was an open-ended wonder, something that got better every time you downloaded an app or game.

Since then, there have been other innovations, some from Apple, many more from the Android world, centered around form factors, wireless charging, curved screens, and so on. But there really hasn't been a true game changer since that original iPhone, or perhaps the App Store. It's pretty much been a decade of evolution.

Now, finally, that is changing.

And the trigger for this sea-change, which I believe to be as momentous, if not more so, than the iPhone and the modern smartphone, is artificial intelligence, or AI.

Yeah, it's kind of a buzz word. (Or phrase, whatever.) And yeah, every technology giant on earth---Microsoft, Apple, Google, Facebook, Amazon, whomever---is spouting AI, and related terms like machine learning and even quantum computing, at every turn, trying to establish themselves as forward-leaning and advanced.

But there are only a few firms that can lay claim to any deep-seated AI expertise at scale. In the cloud, we see companies like Amazon, Google, and Microsoft. And on the client, we see something very interesting. We see that the most successful AI companies, overall, are those that have a play there as well.

Amazon, for example, has been able to parlay its AI expertise into great success with its Alexa-based Echo smart speakers and, increasingly, other devices. But it's been slowed by its mobile defeat, and has, I feel, a limited runway for future success. Echo is sitting pretty today, but it feels ephemeral.
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