Home / Gadgets / Google and Amazon are spearheading a quiet gadget revolution, and it's going to put pressure on Apple most of all – Business Insider

Google and Amazon are spearheading a quiet gadget revolution, and it's going to put pressure on Apple most of all – Business Insider

Google Pixel 2 6
The Google Pixel 2
smartphone relies on artificial intelligence, not cutting-edge
specs, to make its sales pitch to customers.

Hollis Johnson/Business Insider

  • Gadgets are going through a major change
  • AI and cloud computing are more important than “speeds
    and feeds”
  • The shift benefits Google and Amazon and poses a big
    risk for Apple

Way back in 1965, Intel cofounder Gordon Moore predicted that
computers would get twice as powerful every two years — a
prediction which has mostly come true, and is now enshrined as
.” However, many, including Moore himself, now believe
Moore’s Law is
screeching to a halt

It’s going to mean a huge shift for the technology industry.

“To be honest, it’s going to be tougher and tougher for
people to develop new and exciting products every year,” said

Google hardware boss Rich Osterloh, on stage
at the company’s
recent Pixel 2 phone launch event.

The iPhone you own today is
many millions of times more powerful than NASA’s state of the
computers when Moore posited his famous law. But
whichever smartphone you own ten years from now may not
be that much more powerful than the
iPhone X you might be getting in November
, if only in terms
of processing power.

So, yes, change is in the air. It’s going to require a new way of
thinking about hardware. And, so far, it’s Google and Amazon
leading the charge, even as this shift stands to hit
hardware-centric companies like Apple hardest.

Artificial intelligence squeezes out more performance

At the most basic level, the idea is that if processors aren’t
going to get much faster, then the burden is to make better
use of the ones we’ve got. This is a big piece of why artificial
intelligence is suddenly such a popular idea across Silicon
Valley — it means that processors are working
smarter, not harder
, to borrow an old chestnut.

Take, for example, the Google
Pixel 2
smartphones, released earlier in October. When they
were announced,
Google  implicitly acknowledged
that, in terms of tech
specs, the Pixel 2 is nothing special. However, Google baked all
kinds of artificial intelligence goodness into the Pixel 2.

gordon moore
Intel co-founder Gordon
Moore, who posited the famous law about the rate at which
technology improves.

Justin Sullivan /
Getty Images

The Google Assistant is very good — so good, that Apple should be
embarrassed about how far behind Siri is. With the
Pixel Buds headphones
, the Pixel 2 becomes a
universal translator
, like something out of “Star Trek.” And
the Pixel 2’s already-excellent camera is only going to get
better, with the surprise revelation that
Google custom-designed a processor just for photos
…and that
it hasn’t even been activated yet. 

Suddenly, by
applying its considerable edge in artificial intelligence
Google has transformed an unremarkable little machine into a
flagship. If the phone has a weakness, its on that hardware side,
as users report major discoloration and burn-in on their Pixel 2

Cloud computing makes anything with internet access smarter

Here’s another example, this time from Amazon, which has
barged into the hardware market thanks to its line-up
Echo devices and the Alexa smart agent that powers
them. In terms of raw capabilities, a
$50 Amazon Echo Dot
is just as smart as a $229
Amazon Echo Show
, because Alexa actually “lives” in Amazon’s
massive data centers.

“Because Alexa’s brain is in the [Amazon Web Services] cloud, her new abilities are available to all Echo customers, not
just those who buy a new device,” as
Amazon CEO Jeff Bezos put it on the company’s latest earnings

amazon fire tv
Because Amazon Alexa’s
“brains” live in the cloud, every single Amazon Echo and other
Alexa device get new features at the exact same time — no matter
how long ago you bought them.


When you ask Amazon Alexa (or Google Assistant, or Apple’s Siri,
etc.) a question, it gets shunted up to the cloud to slice,
dice, and analyze what you said, to make sure it gives you the
best answer. A pleasant side effect of this principle is that you
don’t need the latest, greatest hardware to take
full advantage.

With those tech titans doing the heavy lifting, processing-wise,
even old devices can learn great new tricks. It makes upgrading
to the latest gadget less important.

And remember that for
Google and Amazon, especially
, their fortunes aren’t tied to
getting people to upgrade their devices, anyway — the
ultimate goal is to get people to look at more ads and shop more,
respectively. Whether or not you upgrade your Pixel or buy a
shiny new Echo is, ultimately, irrelevant to these companies.

The heat is on for Apple

The ultimate side-effect of all of this is that it’s going to get
harder and harder to get people to upgrade their phones,
computers, and other gadgetry. Once technological progress starts
flattening out, there’s only so much incremental improvement you
can use to sell a new phone. 

For Apple, this is an existential threat. So much of its revenue
comes from sales of each successive version of the iPhone, so any
trend that gets people to keep their devices longer poses a
threat to its business model.

We’re already getting a little taste of how Apple is faring under
this pressure. We’re seeing early signs that a surprising
number of Apple fans
skipped the iPhone 8 and are going instead to the older, cheaper
iPhone 7
, apparently because the
differences are so slight
that it wasn’t worth the additional

iPhone X iPhone 8
Apple’s latest iPhones
show how difficult it is to make a new device


While Apple has been investing heavily in R&D, it still can’t
match the progress made by Amazon, Google, or Microsoft in AI and
cloud computing — you only need to look at the
vast difference between what Alexa and Google Assistant
can do, versus the limitations of Apple’s Siri. A lot of the
smartest apps for iPhone come from Google itself, including the

popular Google Photos app

And it’s no coincidence that Amazon and Google operate their own
cloud computing platforms for outside app developers to

This doesn’t mean Apple is doomed. If nothing else, the

sellout of the new iPhone X
proves that Apple fans will still
line up, figuratively and literally, to buy an expensive,
powerful, shiny new gadget.

But with the move to hardware that becomes
smarter over time, selling products on the basis of
processing power and screen resolution alone will become much
more difficult. The thought process and conversations that we
have around buying new devices will be completely different
— Apple better make sure it knows how to talk to


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