Alphabet Inc (GOOG, GOOGL) is reportedly releasing an Apple Inc. (AAPL) iPhone 7 killer sometime in 2016, and the news is probably being taken just as hard by Tim Cook as it is by Android phone manufacturers such as Samsung Electronics (SSNLF).
As stated in the The Telegraph, Google is “in discussions with mobile operators about releasing a Google-branded phone that will extend the company’s move into hardware.”
While Google has certainly had a hand in the smartphone game with its Android operating system, the hardware was left to other companies like Samsung. If Google begins taking over the hardware as well as the software, it will regain greater control over its operating system in the marketplace, much like Apple with iOS.
Indeed, CCS Insight analyst Ben Woods tells the The Telegraph that Google is “concerned that Android is fragmenting,” as much as it is “annoyed” with the iPhone’s perceived premium status on the market.
This isn’t entirely out of left field, as Google demonstrated a first-party designed smartphone in Project Ara at Google I/O just last month, which is a modular phone with the ability to switch out components such as larger batteries, a glucometer for diabetics and air-quality sensors.
While Project Ara, slated for a 2017 release, is likely to have third-party manufacturers, Google’s latest rumored smartphone will see the company take over design, manufacturing and software.
That’s a huge blow to third-parties running Android software, which Google will likely cripple in favor of putting a more capable Android OS on its Google-branded device(s).
And it’s just as big a threat to Apple, which has seen a rash of negative sentiment surrounding the decision to remove the headphone jack from the iPhone 7.
The news hasn’t done much for GOOG stock today — which is down 1.6% — as the so-called “Brexit” rout continues. Still, it could be a major catalyst for the company moving forward as it takes over more of the smartphone market and usurps users into a Google-centric ecosystem.
