Under the wave of ChatGPT sweeping the world, Samsung, an old friend for many years, suddenly gave Google a "backstab".
On April 17, according to foreign media reports, Samsung is considering changing the default search engine for its phones and tablets from Google to Microsoft Bing. Negotiations are ongoing, and Samsung has not yet decided to change course.
Microsoft Bing has been lagging behind Google before. But with the launch of the new Bing, which is backed by GPT-4, its experience has jumped sharply, and many Google users have flocked to it. This may be an important reason why Samsung is considering replacement.
Source: Microsoft official website
As the world's largest consumer electronics manufacturer, Samsung sells hundreds of millions of mobile phones, tablets and other digital products around the world every year. To become the default search engine on these products, Google pays Samsung $3 billion a year.
Since releasing the first Android phone in 2009, Samsung has been tied to Google's search engine. Since 2012, Samsung has been the number one in the global mobile phone market and has maintained this position to this day. Coupled with the support of other manufacturers in the Android camp, Google firmly occupies the leading position in the global mobile search market.
Public data shows that in 2009, Google's share of the global mobile search market was less than 70%; It has risen to more than 90% in 2022, with almost no competitors in sight.
If Samsung moves away from its alliance with Google and embraces Microsoft Bing, Google Mobile Search will lose a large number of users and may even jeopardize its market dominance.
In addition to Samsung, Google is also paying huge sums to another tech giant, Apple, in order to become the default option on devices such as the iPhone.
In 2005, Google struck a deal with Apple to become the default search engine for Apple's own browser, Safari. In the following decade, with the continuous expansion of the iPhone, iPad and Mac product line, Apple's product sales have risen, and Google's payment fees have also risen.
According to publicly available information, Google paid Apple $1 billion in 2014 to maintain its position as Safari's default search engine. By 2018, that cost ballooned to $9.5 billion; $15 billion in 2021; In 2022, it reached a staggering $20 billion.
These investments have paid off handsomely. According to information previously disclosed by the US Department of Justice, nearly half of Google's search traffic comes from Apple devices, and users of Apple products have higher advertising value. In other words, more than 50% of Google's search advertising revenue comes from the Apple ecosystem; In 2022, the revenue of this part of the business will reach $162 billion.
Now, Samsung has the news of "breaking up" with Google's search engine, and whether Apple will follow up is particularly interesting.
After Google launched the Android system, Apple has repeatedly moved the mind of "de-Googleization" and replaced it with its own products in functions such as maps, but has not yet touched more critical search functions; With the right alternative, it's not impossible for Apple to completely part ways with Google. After all, for the supergiant with revenues of nearly $400 billion last year, it is not unacceptable to hit strategic rivals hard at the cost of $20 billion in lost revenue.
Samsung's heart will also put Google in a wider range of danger: if it cannot hold the search engine as the entrance to mobile phone traffic, then the highly bound Google "family bucket", such as Gmail, YouTube, Google Maps, etc., will also face the challenge of user diversion. Even the lower Android system may encounter major challenges.
The Google empire, which dominates the global mobile Internet, is beginning to show signs of falling apart. Coupled with the fierce Microsoft, if Google cannot quickly come up with a strong response, the future of the empire is difficult to say optimistic.
A
In the face of Samsung's potential backstab, Google is quite "generous" on the surface, but it is also trying to change behind it.
A Google spokesperson told the media that mobile phone manufacturers are free to adopt technology from different companies to improve the user experience. Google is constantly improving its search engine, giving users and partners more reasons to choose Google.
But Google employees are far less breezy than they are. According to foreign media reports, in March this year, after learning that Samsung may switch to Bing, there was panic within Google. It is already taking steps to try to avoid changing minds among key phone makers like Samsung.
On the one hand, Google tries to tinker with existing search engines to "ChatGPT" the search engine experience.
According to people familiar with the matter, Google has launched a new project called "Magi" to use AI technology to add more features to existing search engines. More than 160 people are already working full-time on the project, and designers, engineers and executives are creating, tweaking and testing the latest versions in the "sprint room."
New features include making search engines more talkative, like chatting with enthusiastic people; It also tells you what they want to know based on what users search for when they start using it. Users can use Google Earth with the help of AI and search for music through chatbots.
In addition, it can answer programming-related questions and write code according to needs. And this is one of ChatGPT's most attractive productivity features.
The Magi project is still in its early stages and has just started employee internal testing. Google plans to release the tools to the public next month, adding more features this fall. According to Google's plan, Magi will have 30 million users in the United States by the end of 2023.
However, Google doesn't seem to want to expect too much from Magi. A company spokesperson said: "Not every brainstorm or product idea is published; But we're excited to bring new AI capabilities to search and will share more details soon. ”
On the other hand, Google is also developing new AI applications around search scenarios. This includes a tool that generates AI images in Google Images search results, an AI language teaching app, and a chat-search bot.
But Google's most critical defense action is still the newly launched chatbot Bard.
After ChatGPT became popular, Google rushed to the battle, showing the benchmark product Bard in early February this year, powered by its own LaMDA model. But the product performed poorly, making factual errors in answering simple questions, causing Google's stock price to fall sharply, wiping about $170 billion in market value in two trading days.
Source: Google Brad official website
In addition, Bard only supports English, does not have programming capabilities, and does not support multimodality for the time being. There is a clear gap with GPT-4, and it is difficult to carry Google's banner in the generative AI track for the time being. Even Google says Bard is just "a complementary experience to search."
However, Google revealed at the end of last month that it plans to switch Bard from a lightweight model of LaMDA to PaLM, which has a parameter size of up to 540 billion, equivalent to four times the former. Bard's overall performance is expected to take it to the next level.
The problem is that Google has no plans to integrate Bard into the search engine for the time being, instead setting up a separate page for Bard. This may be because Bard is immature, and Google is still out on how to make money from generative AI. If mobile phone manufacturers continue to guard Google, although they can continue to make money, they may miss the "generative AI + search engine" and their product power will be weakened. It is not surprising that Samsung has set its sights on Microsoft at this time.
B
If Samsung replaces Google with a new Bing that integrates GPT-4, the most direct benefit is that it can rub a wave of ChatGPT and generative AI heat, boosting user and industry confidence.
In 2022, Samsung will occupy 21.6% of the global mobile phone market, with an advantage of less than 3 percentage points, continuing to beat Apple to rank first in global mobile phone shipments. However, Samsung mobile phone shipments were only 260.9 million units, down 4.1% from the previous year, which was not ideal.
Samsung's mobile phones are no longer sold, which is just a microcosm of the stagnant growth of the global smartphone market. With the stagnation of mobile phone technology innovation, the replacement cycle of consumers has been significantly lengthened, and the days of mobile phone manufacturers burning cooking oil and flowers are gone; Even the leading boss Samsung, it is difficult to escape the coldness of the entire industry.
At this time, switching the mobile phone's default search engine to "popular fried chicken" Bing, although it may not be able to immediately increase sales, but can also be counted as a fashionable selling point. Samsung only needs four or two pounds to adapt to the user's current preferences and catch up with the fast train of ChatGPT.
The greater significance of this move is that Samsung can take advantage of Google's eventful autumn to raise the unit price of the default search engine.
The past year has not been good for Samsung. In addition to the decline in mobile phone sales, the profitability of the entire company is also shrinking significantly. In 2022, Samsung's sales increased by 7.93% year-on-year, but its operating profit fell 16% to 43.37 trillion won (about 234.2 billion yuan), of which the fourth quarter operating profit was 4.3 trillion won (about 22.5 billion yuan), down 69% year-on-year.
Under the general trend of the overall downward trend of the mobile phone industry, the profit expectation of Samsung's main business this year is also not optimistic. In this context, in order to increase profits, charging more fees to Google, a perennial big moneymaker, is a simple and easy means.
What's more, compared with Apple, the default search engine fee charged by Samsung to Google can be called "cabbage price".
According to public information, Samsung mobile phone shipments in 2022 will be 260.9 million units, Google will pay about $3 billion, an average of $11.5 per unit; during the same period, Apple mobile phone shipments were 226.4 million units, but collected $20 billion from Google, an average of $88.3 per unit, almost 8 times that of Samsung.
In the past, the reason why Samsung was willing to accept Google's two dates, in addition to the cooperation between the two sides for many years and friendly relations, a very important reason was the lack of alternatives in the market.
On Android mobile devices, the Google search engine is the entrance to Google's family bucket, which not only aggregates and distributes mobile phone traffic, but also firmly gathers users in the ecosystem with functions and services that cover subdivided scenarios such as work, life, entertainment and social networking. If they switch to other search engines, mobile phone manufacturers may face large-scale user loss. This makes it difficult for Google's competitors to raise their heads, and the living space is getting smaller and smaller year by year.
Before 2023, with the double blessing of the search engine and Google's family bucket, the Google empire will remain forever. But ChatGPT came out, triggering a wave of generative AI technology that rewrote the rules of the game from the bottom. People's expectations for search engines are no longer just a list of search results, but a question and answer like a real person, and can solve more diverse and complex problems.
The new Bing met people's expectations. It integrates the capabilities of ChatGPT into the search scene, showing the basic appearance of the next generation of search engines; Google, by contrast, looks archaic and lacks innovation.
Users are already voting with their feet. After integrating the chatbot function, the global download volume of New Bing increased 8 times, while Google fell 2% at the same time; In just one and a half months, New Bing's page views grew 15.8 percent, while Google slipped 1 percent. Most people in the industry believe that this trend of rising and falling will continue.
The invincible Google empire was suddenly torn open by AI technology innovation. Samsung, which has been sending users to Google for many years, saw a rare opportunity to renegotiate prices. At this time, the rumor of "Samsung switching to Bing" came out, even if it did not come true in the end, it could bring greater bargaining power to Samsung. Google will have to pay a higher price than ever if it continues to be the default search engine for most smartphones.
C
Old friend Samsung has given Google a new problem; But it's not Samsung that really gives Google a headache, but OpenAI and the Microsoft behind it.
Google and Microsoft have a long history of competition and cooperation, but on the whole, the two giants are good at winning in different fields, and the previous war was not particularly fierce.
Since its birth, Microsoft has always had an absolute advantage in the field of PC operating systems. At the same time, in the office software, cloud computing, video games and other markets, Microsoft also occupies a pivotal position. Its competitive keyword is "PC+productivity".
In contrast, Google emerged in the Internet era, defined the basic path of Internet information distribution with search engines, and covered the corners of web surfing with mailboxes, videos, maps and other products. After the rise of the mobile Internet, Google has become the biggest winner with Android, and its competitiveness revolves around "mobile + information".
The two giants have also tried to break into each other's backyards. For example, Microsoft made the Windows Phone mobile operating system, and also spent $9 billion to acquire Nokia, intending to stand shoulder to shoulder with Apple and Google; Google has also introduced the Chrome OS desktop operating system and made Chromebook laptops.
However, none of these costly attempts have yielded decent results. In the endless toss, Microsoft's mobile business has never really become a TOP3 player; Google's vision of a web operating system eventually proved impossible.
This may not be a bad thing. The two companies have forged their own technology empire around their respective core businesses. The competitive strategy of each territory also avoids unnecessary waste of funds and resources, and indirectly provides fuel for technological innovation.
But after the arrival of generative AI, Microsoft for the first time mastered the killer that hit Google's base. Microsoft's offensive instantly became fierce, while Google's response seemed faltering.
Google doesn't lack technical acumen. In fact, it has always been the AI pioneer of the global Internet, and Alpha Dog's defeat of Ke Jie is a glimpse of Google's AI technology accumulation. In terms of generative AI, Google has been wrestling with OpenAI for many years, once inextricably fighting, alternately leading in dimensions such as large model parameters.
However, OpenAI took the lead in taking off the golden apple of the AGI era, and Microsoft, which had been betting for a long time, won hemp; Google, however, plunged because of Bard's poor performance, and its innovation was questioned like never before.
In this AI competition for the next era, Google has suffered a defeat from the beginning, in addition to technological innovation factors, the bigger reason may be that OpenAI has Microsoft as a backer.
Since investing $1 billion in OpenAI in 2019, Microsoft has cumulatively invested about $13 billion in it. In addition to abundant funds and ammunition, Microsoft has also sent a broad range of AI application scenarios: whether it is the new Bing, or the Microsoft 365 office suite that includes Word, Excel, and PowerPoint, it is an exclusive stage for OpenAI to exert its technical and product capabilities. This is a competitive advantage that Google can hardly match.
Google's new opponent is a "fit monster" with money, technology, landing scenarios and monetization paths. Compared with its competitors in the field of search engines and mobile operating systems, the "OpenAI + Microsoft" combination is much more powerful.
At present, productivity scenarios are recognized as the most suitable areas for generative AI implementation. But Google lacks Microsoft 365 in the field of productivity, even if it quickly closes the distance with OpenAI in large models and their applications, it is difficult to have the opportunity to quickly roll out and gather a considerable number of users.
In the climbing stage of Google AI, the support from old friends such as Samsung is particularly valuable. They have a huge number of devices and users, which is enough to provide a wide landing scene for Google's large model. But now, Samsung has shown signs of joining Microsoft's camp at any cost. If former allies run away, Google's AI will be much more difficult.
In 2009, Samsung released the first smartphone Galaxy GT-I7500 equipped with Google's Android system, and Google's conquest of the global mobile Internet began. Fourteen years later, the former partner wants him, and although the Google empire is still strong, the cracks and weaknesses have become more and more prominent.