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Money and Markets: Investing Insights

Pixel Leads Voice-Command Smartphone Revolution

Jon Markman | Tuesday, November 8, 2016 at 7:30 am

Jon Markman

Google wants to change the way we interact with technology. The fact that tech journalists and Wall Street analysts love its new smartphone doesn’t hurt either, by the way.

The new Pixel smartphone looks and feels a lot like an iPhone by design. However, the real magic is software, especially the built-in Google Assistant. Google spent the better part of seven years weaving machine learning into everything Pixel does. Plus, the smartphone evolves mobile computing from touch to voice.

There is a lot of value in that evolution. Voice is fast, context driven, intensely personal and doesn’t take drivers’ hands off the steering wheel. All of these things remove friction. That’s important.

When Amazon introduced its Echo line of Internet of Things appliances, many in the tech world were caught off guard by its simplicity and immediate success. You simply told it what you wanted and the digital assistant made it happen. There was no requirement to download and configure a mobile application, no need to learn the interface, and no list of choices to pick from.

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Pixel brings that simplicity to a mobile handset. It also brings all the personal information Google knows about you and its enormous Knowledge Graph of 70 billion facts. So, you can query your Pixel about the traffic on your evening commute, the status of your Amazon deliveries, and the interpretation of the lyrics to Orange Crush by REM. Or you can ask it to call a phone number not in your contact list.

Google’s Pixel puts the “smart” in smartphone.

This gives Pixel a leg up on iPhone by Apple. Although Siri debuted in 2011, Apple’s digital assistant has been a slow learner. Walt Mossberg, of Recode, wrote an entire article asking: ”Why does Siri seem so dumb?”

You can bet Google will not suffer that fate. Its DeepMind project attracts the brightest people in artificial intelligence, and it is already far ahead of the pack in terms of accomplishment. Google’s business model is devoted to rapidly deploying machine-learning software at scale to collect and understand data.

That is the key. We are living in an era where the two most valuable commodities are data and time. Google is planting a flag at the intersection. All of its services are collecting massive amounts of data. Its algorithms are efficiently learning what we like and how best to serve us information.

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And Google’s executives know very well that as the migration to voice interface begins, hardware will fade into the background and a new platform war will develop. Very few will survive. Users will demand portability and competence. They will reward platforms with the least amount of friction, those that save time.

Kleiner Perkins Caufield & Byers partner Mary Meeker likened voice to a “new paradigm in human-computer interaction” at her widely-regarded Internet Trends presentation. Voice is the logical future of computing.

Alphabet (GOOGL) is the best-positioned company to benefit. The stock is still a buy into any material weakness.

Best wishes,

Jon Markman

Jon began his career as editor, investment columnist and investigative reporter at the Los Angeles Times. As news editor, his staffs won Pulitzer Prizes for spot-news reporting in 1992 and 1994.

In 1997, Microsoft recruited Jon to help launch MSN’s finance channel, where he served as Managing Editor. In that capacity, Markman became the co-inventor on two Microsoft patents.

From 2002 to 2005, Jon served as portfolio manager and senior investment strategist at a multi-strategy hedge fund.

Since 2005, Mr. Markman has specialized in helping everyday investors buy tomorrow’s technology superstars BEFORE they skyrocket.

Mr. Markman is the author of five best-selling books, including Reminiscences of a Stock Operator: Annotated Edition; New Day Trader’s Advantage, Swing Trading and Online Investing.

{ 7 comments }

Chuck Burton Tuesday, November 8, 2016 at 10:18 am

If Alphabet outdoes Apple, and at a favorable price, they will take a huge part of the smartphone market.

Sanford Argabrite Tuesday, November 8, 2016 at 12:13 pm

It will be interesting to see if Google can get people to switch from Apple. My bet is that they will have a hard time doing so. Apple has hardware that is consistently superior to most other manufacturers (at least I haven’t heard of any I Phones blowing up). Fully integrated hardware. The software in the Google phone I’m sure is superior. By the way, I am a long time Android user and have no plans to switch.

Merv Nash Tuesday, November 8, 2016 at 4:07 pm

I hope the Google voice thing catches on and is a huge success. I am more than over the overpriced pretty Apple fad era and can’t wait for it to fade into the background again.

James C Thursday, November 10, 2016 at 6:15 am

The amazing thing about technology is that eventually robots are replacing, human beings in the workplace. In the far east robots are replacing some doctors in hospitals. Thankfully Obamaid was brought in for those of us of advancing years. He did do some good work in there though. America will be a great nation its just going through a temporary recession at the moment.

mandi Saturday, November 12, 2016 at 7:45 am

It would be far better if GOOGLE didnt rig up the total computer system to suit them selves and it would be even better if they werent out to ruin a Company in TEXAS USA as for this GOOGLE who think they own the internet but are so far from reality of owning a toothbrush and same goes for this Pixel network as they are as bad as each other so why did alll mobile telephones go on fire then in airlines same as MH370 which is the same way so whos pulling the trigger on these mobile telephones or is it GOOGLE or PIXEL

Harry Sunday, November 20, 2016 at 4:48 am

Jon, thanks for peeking ahead (days?) at voice active cell phones – – – whee, no hands!

What about voice active computers? No more touch nor necessary typed intructions?

Harry

Wyndell Wednesday, December 7, 2016 at 9:06 am

You know what? I’m still of the opinion that “may the best man win” in the field of the cell phone is best approach; I will buy what I think is best, be it Apple or Google, right now,
Apple is the winner; tomorrow, I don’t know, and I really don’t care, I will buy the best when it comes on the market. Competition of what counts, 2nd place is for losers!!

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