Google Might Finally Compete With Apple In Smartphones

by
Don Reisinger

@FortuneMagazine

June 27, 2016, 10:36 AM EDT

Google might already be competing with Apple in smartphone operating systems, but it has yet to make hardware. According to a new report, that could soon change.

Google GOOG is planning to at least take “more control” over the manufacturing process of new Android-based smartphones, The Telegraph is reporting, citing sources who claim to have knowledge of its plans. The move, the sources say, will make Google more like Apple APPL , controlling everything from the product’s design to the software it runs.

Of course, Google already sells its own branded smartphones under the Nexus name. However, those devices are made by third-party companies, like China-based Huawei, LG, and others. Indeed, over the last several years Google has sold Nexus-branded smartphones, but has never developed its own.

Google’s strategy stands in stark contrast to Apple AAPL , which dominates all facets of the mobile experience. The Cupertino, Calif.-based company designs its own smartphones and keeps an iron-like grip on its iOS mobile operating system by not allowing other handset makers to use it. By doing so, Apple is able to control the iPhone “experience.”

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Google, on the other hand, has long relied upon a software model where it offers the operating system companies can use in their own devices. The move has helped Google’s Android become a dominant force in the worldwide smartphone market, and also helped Google generate bundles of cash on mobile advertising and revenue-sharing with developers.

Despite having a software-first strategy, Google has used its Nexus hardware to get more people to its latest operating systems. The Nexus handsets also tend to offer higher-end features, allowing Google to offer devices that compete more effectively against the iPhone and other flagship handsets.

By not offering its own hardware, Google has been able to attract third-party device partners who rely on Android. It’s also sidestepped any potential concern among those third-parties that Google is trying to compete with its own partners.

Google, in other words, has long tried to look like a hardware company’s partner and not their foe.

By developing its own hardware, however, Google could put itself in the odd position of both supporting its third-party vendors and competing with them. Still, rumors have been swirling for years that Google might eventually take the plunge and develop its own hardware.

While history would suggest that Google will continue on the same path and maintain its successful strategy, The Telegraph‘s sources say Google wants to take more control over Android to get more people running high-end hardware and its latest operating system—a challenge it’s faced as both vendors and carriers have proven slow to upgrade consumer devices to the latest operating systems.

For more on Google, watch:

Those sources added that Google is so enticed by the idea that it’s planning to launch its own handsets by the end of the year.

Still, it’s hard to say what’s true. Google hasn’t said what its plans might be. And if history is to be our guide, it would suggest Google wouldn’t want to compete with the companies it relies upon to build its own hardware.

We’ll likely find out for sure later this year, when Google holds its annual Nexus unveiling event.

Update 06/27/16 at 2:48 p.m. with Google’s decline comment.

All About Samsung’s New Galaxy S7

by
Don Reisinger

@FortuneMagazine

February 22, 2016, 1:31 PM EDT

As expected, Samsung on Sunday took the wraps off its long-awaited flagship smartphones, the Galaxy S7 and the Galaxy S7 Edge.

Like their predecessors, the Galaxy S6 and Galaxy S6 Edge, the new Samsung handsets were unveiled ahead of Mobile World Congress in Barcelona on Sunday with distinct designs. The Galaxy S7 sports a bezel around a 5.1-inch screen boasting a “quad-HD” resolution. The Galaxy S7 Edge, however, nixes the bezel on either side of its 5.5-inch quad-HD display. The curved edges that sweep around the smartphone’s sides can be used to provide quick access to contacts or icons for important apps.

Aside from a slightly larger battery in the Galaxy S7 Edge, there aren’t many differences between the Galaxy S7 devices. Both will come with either an octa-core or quad-core processor, depending on the country, and run on Google’s Android 6.0 Marshmallow operating system. The handsets feature wireless charging capabilities and, thanks to their bundled fingerprint sensors, support Samsung’s mobile-payment platform Samsung Pay.

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The Galaxy S7 line was unveiled at Samsung Unpacked, an annual event the technology giant holds each year ahead of Mobile World Congress. In addition to its Galaxy S7, Samsung also announced a new, 360-degree camera, known as the Gear 360. The company has spent its presentation touting virtual reality, complete with a surprise appearance by Facebook CEO Mark Zuckerberg.

Pomp and circumstance aside, Samsung’s smartphone unveiling was critical. The company is still the world’s largest handset maker and shipped nearly 325 million smartphones last year alone, according to research firm IDC. That figure easily topped Apple, which shipped 231.5 million smartphones in 2015.

Still, Samsung is starting to lose its grip on the market. Indeed, over the last several years, Samsung has acknowledged that its smartphone business is troubled. Late last year, the company announced that it would offer fewer devices in 2016 and focus its resources in hopes of improving its business.

If total shipments were the benchmark by which Samsung judged its business, it would suggest it’s somewhat healthy: its nearly 325 million shipments were up 2.1% compared to the 318.2 million smartphones shipped in 2014.

However, further investigation reveals why Samsung is concerned. The company owned 22.7% of the worldwide smartphone market in 2015, down from 24.4% in 2014. Meanwhile, all of its competitors grew their smartphone shipments far more robustly. Huawei, for instance, led the field with 44.3% year-over-year growth.

For more on 360-degree cameras, watch:

Huawei’s success is especially troubling for Samsung, which has long relied upon China’s booming middle class to boost smartphone shipments. Research firm Canalys said last month that Samsung’s Chinese market share fell from nearly 12% to less than 8% by the end of the fourth quarter. Huawei and China-based competitor Xiaomi now collectively own approximately a third of the Chinese market, thanks in part to stealing customers from Samsung.

“With continuously increasing pressure in the high end from Apple, and at the low end to midrange from Chinese manufacturers Xiaomi, Huawei, ZTE, and others, Samsung faces a multi-front battle,” IDC said in a statement last month.

Given that, Samsung’s Galaxy S7 line is even more important. A successful start to the year will help Samsung fend off some of those competitors. But as Huawei continues to succeed internationally, and with the iPhone 7 looming large, it’s possible Samsung may be bloodied in those battles as the year wears on.

Until then, Samsung is touting its Galaxy S7 as the latest and greatest smartphone for those who want a high-end handset. By nearly all measure, it certainly looks like a contender for that crown. In addition to the features outlined above, the handset comes with a slick design, 4GB of onboard memory, and a 12-megapixel rear-facing camera to complement its 5-megapixel front-facing lens.

The Galaxy S7 and Galaxy S7 Edge will start shipping in the middle of March.

Read this before buying one of Google’s new phones

by
Don Reisinger

@FortuneMagazine

October 20, 2015, 3:05 PM EDT

Reviews of Google’s latest batch of Nexus phones are in. The verdict? Pretty good.

The Nexus 5X—made by South Korean electronics giant LG—is a little cheaper, smaller and made of plastic. The Nexus 6P—made by the Chinese telecom giant Huawei—is slightly larger, more expensive, and encased in aluminum. Everyone seems to agree that the latter is the preferred choice of the pair, but that superior quality comes with a cost: the base price is $120 more.

Early reviewers have praised a few particular features on the new phones. Namely, greatly improved cameras (never Nexus’ strong suit), convenient fingerprint sensor placement (on the backside of the devices, rather than the front), and, above all, bargain prices (starting at $379 for the 5X and $499 for the 6P).

Both run Android 6.0 Marshmallow, Google’s GOOG latest mobile operating system, and come with Google Now on Tap, a contextual search tool that acts like Apple’s AAPL Siri.

Both devices go on sale at the end of October, and they’re available now to pre-order. Here’s a rundown of what the early reviewers are saying.

Nexus 5X (LG-made)

“For those who yearned for the days of budget- and pocket-friendly Nexus handsets, the 5X is for you.” (Engadget)

“…it looks like Google (and LG) have finally narrowed the camera gap with Apple’s iPhones. The Nexus 5X’s cameras, while not significantly better than the iPhone 6S’s, are very capable shooters. That alone is a huge win for the Android camp.” (Mashable)

“Hardcore fans may be difficult to please and even fickle at times, but if you give them what they want, they can be your biggest supporters. With the Nexus 5X, Google is giving those die-hard Nexus 5 fans all that and then some.” (Verge)

“The more time I held it in my hand, the cheaper it felt. I’ve tried out a boatload of devices and being light is a good thing…but feeling like cheap plastic totally turns me off. Google and LG calls it ‘premium injection molded polycarbonate,’ but that’s not changing my mind.” (TechCrunch)

“Price alone is a huge driving factor in making the 5X so compelling, but it needs so much more to captivate a wider audience, especially when we’ve been spoiled by so many great-performing, low-cost premium phones.” (PhoneArena)

Nexus 6P (Huawei-made)

“Spoiler: it’s good.” (Wired)

“I wouldn’t call it a particularly attractive phone compared to the iPhone 6s Plus or the newest Galaxy Edge phones from Samsung, but it’s not ugly either. It comes in aluminum, graphite (black) and frost (white).” (Forbes)

“It’s a sleeker, smaller, more powerful take on the phablet formula Google and Motorola tried to crack with the Nexus 6, and it seems to hit all the right notes. Hell, with a price tag that starts at $499, it’s even cheaper than its predecessor.” (Engadget)

“When Google imagined hardware and software working in perfect harmony one day, the 6P was the device they unknowingly fantasized about.” (TechCrunch)

“For a first stab at a Nexus phone, Huawei hit the ball out of the park.” (Mashable)

Both

“[T]he 5X is very obviously the lesser one. Compared to the larger (and pricier) 6P, it has compromises in both performance and design. And though it fights really well in its mid-tier price bracket, if you bump it up to the next weight class, it doesn’t quite hold up to the true flagships from companies such as Apple or Samsung.” (Verge)

“The Nexus 5X and 6P are two of the best Nexus devices ever produced. It’s a common line that people say every year, but these are the first Nexus devices that don’t have a huge deal breaker attached to them. Google and its partners have finally nailed two of the things Nexus devices have traditionally been poor at. The camera is actually good—great, even—and can hold its own against the best mobile shooters out there. And the battery life is just as good as any other flagship as well.” (Ars Technica)

Follow Robert Hackett on Twitter at @rhhackett. Read his technology and cybersecurity coverage at fortune.com/author/robert-hackett. And subscribe to Data Sheet, Fortune’s daily newsletter on the business of technology, where he writes a weekly column.

For more on Google’s recent product announcements, watch this video.

Is your phone safe for work?

by
Don Reisinger

@FortuneMagazine

October 15, 2015, 3:33 PM EDT

Mobile security is an increasingly important frontier in the war between hackers and cyber defenders. The past year alone has been a steady stream of Apple iOS hacks, Google GOOG Android snafus, and other problems for mobile phones and tablets.

Are businesses paying enough attention to that risk?

Fortune checked in with Kevin Mahaffey, co-founder and chief technology officer at mobile security firm Lookout, about the state of mobile security. His company recently released a survey examining the issue.

Mahaffey’s company, based in San Francisco, develops apps that detect and defend against electronic attacks. It was founded in 2007, the same year Apple AAPL unveiled the iPhone.

In June, Lookout entered the enterprise market where it competes with companies like Check Point CHKP . Lookout has 75 million users worldwide, about half of whom are in the United States.

“We were a company started by nerds and engineers—we like using data to understand things,” says Mahaffey of Lookout’s recent research report.

The most surprising finding in the report, he says, is the percentage of data breaches attributable to mobile devices. Nearly three-quarters of the 100 IT and security leads surveyed (about half of whom are chief information security officers) reported that their organizations have “experienced a data breach as a result of a mobile security issue.”

Common reasons for mobile data breaches? Malware-laden apps, security holes, and unsecured Wi-Fi connections, according to the study.

As businesses continue to let employees use their personal devices for work, smartphone security is likely to rank higher and higher on the IT priority list. That much the report makes clear. “Mobile devices are not just being used to post to Twitter and read email anymore,” Mahaffey says. “Everything I can do on my laptop, I can do on my mobile device.”

As many as 82% of respondents said that employees in their organizations have access to “the majority of their corporate data” through mobile devices. That reality—intended to lift worker productivity—means that hackers have more ways to gain access to corporate networks. And the IT leads recognize that threat: Nine out of 10 respondents said they plan to invest more in mobility security over the next year. (No doubt good news for Lookout.)

Despite the survey’s findings, the tone of Lookout’s report conflicts with that of another highly cited data breach study: Verizon’s 2015 data breach investigations report. That study downplays the threat posed by handsets.

In Verizon’s VZA view, mobile security is not yet a big issue. “This report is filled with thousands of stories of data loss—as it has been for years—and rarely do those stories include a smartphone,” the Verizon report’s authors write. But they concede that those circumstances will likely eventually change.

Why the disparity, then, between Verizon’s findings and Lookout’s?

Mahaffey says that the different findings might be due to their surveys’ differing methodologies. Verizon’s data is mostly based on its computer forensics team and the breach-related messes at other companies that it’s called in to fix. Meanwhile, Lookout’s report is based on asking IT pros to self-report incidents that their organizations most likely handled internally.

Not all data breaches are created equal, of course. So, perhaps these intrusions in the Lookout report were not as severe.

In any case, it’s always a good idea to take reports by companies with a self-interest in the matter with a grain of salt. Security firms sometimes inflate the risk of attacks to drum up business. Meanwhile, wireless carriers may have an incentive to downplay the risk so as to avoid scaring customers.

As for Mahaffey, he’s undaunted by Verizon’s findings about the relative safety of mobile devices.

“The bad guys, whenever they see gold, they go after it,” he says.

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For more on mobile security, watch the video below.

The BlackBerry CEO’s demo of his new phone is too awkward to watch

by
Don Reisinger

@FortuneMagazine

September 28, 2015, 1:34 PM EDT

Over the weekend, BlackBerry unveiled its so-called Priv phone in its first official demo. Verdict: It’s uncomfortable to sit through.

You can watch BlackBerry BBRY CEO John S. Chen fumbling with the phone, hands hovering maladroitly above its screen and signature retractable keyboard, in an exclusive on-camera interview with Business News Network.

“And the claim to fame, obviously,” he said, presenting the phone’s key feature, “the slider.”

“Your finger will be like a mouse,” he added, waving a semi-clenched hand up and down as though actually manipulating a computer mouse.

The presentation, let’s just say, fails to achieve the level of ex-Apple AAPL CEO Steve Jobs’ panache. Indeed, it’s is a far cry from what consumers have come to expect from rival companies such as Apple, which engineer all aspects of their product demos.

In the video, Chen struggles to open a Google GOOG Chrome search engine app on the phone’s home screen. He awkwardly taps the glass six times, finds that the app is not yet set up, and proceeds to exit it.

“Obviously, it runs Google,” he said, before hitting the roadblock. “Then I have to set it up,” he added. “This is a demo unit.”

Chen’s hand wavers above other app icons as he mumbles and apparently decides to change tack. He talks about the phone’s specs instead.

“So is this going to be the phone that brings back the BlackBerry user that abandoned because they needed a different operating system?” the reporter asked him.

“I think everyone loved the BlackBerry 10. They really do,” he said of the company’s proprietary operating system, which claims a paltry 0.3% market share, according to research firm IDC. “But there’s not enough apps. So if I could provide all of the apps of BlackBerry 10 that would be a smashing success.”

“Unfortunately, I can’t put the two together for all the practical reasons and logistic and financial reasons,” he said, referring to the company’s decision to debut a phone powered by Google’s GOOG mobile operating system Android. “But this is really the best thing we could do.”

You’ve got to feel for the guy.

For more on BlackBerry, watch the demo here. Or watch this Fortune video below.

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