Luxury design, custom chips and brighter displays

Google unveiled the much-anticipated Pixel 9 at an event on August 13, headlined by the foldable Pixel 9 Pro Fold. The new lineup also includes the Pixel 9, Pixel 9 Pro, and Pixel 9 Pro XL, which promise significant improvements over their predecessors, including increased durability, brighter Super Actua displays, better cameras, and longer battery life. The devices are powered by advanced Tensor G4 chips, developed in partnership with Google DeepMind. The new Pixel also boasts the title of being the first Android smartphones to use the satellite SOS feature without the need for a cellular signal. The premium Pixel 9 Pro Fold has a larger front screen as well as an internal display that supports a split-screen feature for multitasking. The second-generation device has the same $1,799 price tag as its predecessor. Meanwhile, the Pixel 9 Pro variants offer powerful features with more than 6-inch displays and priced from $799-$1,099. Pre-orders began on the day of the event, with the Pixel 9 and 9 Pro XL available in stores as early as August 22, 2024. The Pixel 9 Pro and 9 Pro Fold will be available for US customers on September 4, with global sales starting later. This early release should give Google a strategic advantage over Apple, which is set to unveil its iPhone 16 in September.

"Gemini is the key to everything"

Those were the words of Google's vice president of devices services, Rick Osterloh, when unveiling the personal assistant, which will be powered by the Gemini Nano big language model that will be automatically preloaded in the latest Pixel 9s. This is a change from the original option where users had a choice of whether they wanted to use the assistant. However, its use remains optional with the option to revert to the older AI model. They have integrated the assistant into features such as search, YouTube, Gmail, etc., with plans to extend it to Samsung and other Android phones. The model offers many advanced features. One of them is the paid Gemini Live, where the user can choose from 10 human-sounding voices and have realistic and expressive conversations. Google thus wants to compete with OpenAI and its Advanced Voice Mode feature and the new iPhone 16, which will use ChatGPT created by the same company.

Feature-packed

Those who choose a phone based on its photo-related features will definitely enjoy the new Magic Editor with built-in artificial intelligence. This, along with augmented reality in the Add me feature, engages the photographer in group shots. In addition, Pixel 9 Series users can take advantage of the creative capabilities of Pixel Studio to generate images. The latter, however, won't generate images with human faces due to concerns over previous inaccuracies where Gemini produced inaccurate and misleading images of people. Another feature that will make life easier for many is Pixel Screenshot, which will find forgotten screenshots, search for specific dates on them, or create a calendar event based on the invitation data. The Call Notes feature, in turn, creates notes from a phone conversation after obtaining consent from both parties.

In addition to the phone, the watch and headphones

The event also brought the unveiling of the Pixel Watch 3, which will hit the market on September 10. The latter stands out for its unique loss-of-pulse detection feature, which alerts emergency contacts, authorities, as well as passers-by if it doesn't detect the user's pulse, a lifeline in the event of cardiac arrest or other serious medical conditions. The feature will be available in some European countries with plans for certification in other countries. The watch can also summon rescue in the event of a car accident or fall, and comes in new sizes, with a brighter display and improved battery life. Along with them, Google also introduced the Pixel Buds Pro 2 headset equipped with Gemini Live, which according to TechCrunch allows you to have a conversation even when the phone is put down. The headphones, powered by the Tensor A1 chip, offer extended battery life, noise-cancelling technology and an improved compact design. This makes it clear that the company's strategy is clearly focused on deeper integration of AI into everyday products.

Alphabet is at risk of being broken up

While Google has introduced groundbreaking innovations, parent company Alphabet (GOOG) is going through a challenging time. In early August, it heard a guilty verdict for violating US antitrust laws. The case concerned search and advertising services. During the investigation, it was found that the company's contracts, including with Apple, among others, ensured that its search engine was in first place. Google, however, maintains that the reason for their "firstness" is a superior product. The US Department of Justice is currently working on measures to remedy the situation. The worst-case scenario, according to sources close to Bloomberg, is an order to break up the company with a forced sale of key assets such as the Android operating system, the Chrome browser and the AdWords advertising service. The "better" one would be sharing data with competitors, or limiting the benefits associated with AI. According to Bloomberg, however, it is likely that authorities will step in to prohibit such agreements. If the government agrees to a split, it would be a significant win for American justice in this area, affecting not only the running of the company but the wider technology landscape. Similar pressure has been exerted on Microsoft (MSFT), which was threatened with break-up 20 years ago for the same reason, but unsuccessfully.

The stock has fallen in value but has been in the green for a long time

The company's stock performance is affected not only by the court decision, but also by the volatile first week of August, when the global stock market posted significant losses. Alphabet's stock market value was not helped much by the recent mixed second-quarter earnings results, and the unveiling of a new product line did nothing to change that. The stock was trading at $160 on August 14, 16 percent below its all-time high of July 10, 2024. Despite the recent relatively sharp decline, however, the stock value is still high and the company maintains a market capitalization of $1.96 billion. Looking at the development of the value since the beginning of the year, we can see that vsi has gained more than 14 percent, while year-on-year it is a growth of more than 20 percent. The five-year performance even stands at 177 percent.*

Alphabet's share price development over the last 5 years. (Source: Trading Economics) *

The outlook is still uncertain

Although Alphabet is going through a rather challenging period at the moment, the stock has bounced back from its recent slump in recent days, and so it is clear that investors remain confident that the company can handle the challenging situation. Although the possible threat of a break-up remains, the example of Microsoft shows that 'no porridge is eaten as hot as it is cooked'. Not to mention the fact that tech company stock prices are currently being driven by developments and advances in AI, and as Alphabet showed at its last news presentation, it is certainly not going to lose out in a world of competition. It's not for nothing that the tech giants are part of the FAANG[1].

Olivia Lacenova, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance.They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.