Google Parent Alphabet Reports Strong Results on Mobile Ads, YouTube, Other Bets

Google Parent Alphabet Reports Strong Results on Mobile Ads, YouTube, Other Bets

Google’s parent company Alphabet on Thursday reported profit in the recently-ended quarter leapt as money poured in from ads delivered to mobile devices and returns improved on “other bets.”

Alphabet profit was up 32.4 percent to $6.7 billion (roughly Rs. 43,555 crores) on in the quarter on revenue that increased 24 percent to $27.8 billion (roughly Rs. 1,80,724 crores), up 24 percent from the same period a year earlier.

Chief financial officer Ruth Porat credited “strength across Google and Other Bets.”

The earnings topped market expectations, and Alphabet shares jumped in after-market trade on the Nasdaq exchange before concerns about growing expenses apparently caused them to settle back a bit to be up nearly 3 percent to $1,021.

“It is what everybody looks at every time: what is going on with expenses?” independent analyst Rob Enderle told AFP.

“For the most part they seem to be well managed, but you watch to make sure they remember they still have limits even though they are printing money.”

While mobile ads were a main area of growth, they brought with them higher traffic acquisition costs, pushing up Google expenses in a trend seen as unavoidable.

Investing in cloud services and artificial intelligence also means spending more on data centers to provide the massive computing power involved.

“I’ve been really proud of the progress this quarter; launching popular new products and continuing to grow our business in new areas,” Google chief executive Sundar Pichai said in an earnings call with analysts.

“It’s been particularly exciting to see our early bet on artificial intelligence pay off and go from a research project to something that can solve new problems for 1 billion people a day.”

YouTube continued to see “phenomenal growth” with more than 1.5 billion people spending an average of an hour a day watching videos there on mobile devices, and surging use on television screens in homes, according to Pichai.

He boasted of progress winning businesses over to Google services hosted in the internet cloud, where the company competes with Amazon and Microsoft in that market.

Pichai also said that opening day pre-orders for recently unveiled Pixel 2 smartphones were double that seen for the first-generation Pixel.

Google is “seriously committed to making hardware” as well as working with partners such as South Korean consumer electronics giant Samsung which is a major producer of smartphones powered by Android software made available free by the US Internet company.

“The intersection of hardware and software is how you drive computing forward,” Pichai said.

“I think it’s important we thoughtfully put our opinion forward.”

Smartphones and other devices “made by Google” can showcase the potential of its Android and Chrome software, setting a bar for partners.

A corporate reorganisation started two years ago created Alphabet, which has holdings including cash-engine Google and ventures devoted to innovative “moonshots” such as Waymo self-driving car unit and a Loon project for delivering internet service from high-altitude balloons.

Subsidiaries other than Google were put into an “other bets” group which saw revenue in the quarter rise to $302 million (roughly Rs. 1,963 crores) from $197 million (roughly Rs. 1,280 crores) during the same three-month period last year.

Google ads accounted for the bulk of Alphabet revenue, contributing $27.47 billion (roughly Rs. 1,80,369 crores), according to the earnings release.

Alphabet earlier this year spun off a little-known unit working on geothermal power called Dandelion, which will begin offering residential energy services.

Dandelion chief executive Kathy Hannun said her team had been working for several years “to make it easier and more affordable to heat and cool homes with the clean, free, abundant, and renewable energy source right under our feet,” and that the efforts culminated in the creation of an independent company outside of Alphabet.

Meanwhile, Alphabet’s life sciences unit Verily announced a study to track people for years, right down to their genetics, in a quest for insights into staying healthy.

Alphabet also owns Nest, which recently expanded its line-up of smart home devices to include a security system.

Nest, Fiber, and Verily were said to be top performing other bets in the quarter.

Waymo on Thursday announced plans to begin testing self-driving cars in notoriously troublesome ice and snow conditions in the US state of Michigan this winter.


Freedom 251 Maker Bets on Bollywood to Push HD LED TV Orders

Freedom 251 Maker Bets on Bollywood to Push HD LED TV Orders


  • The 31.5-inch HD LED TV costs Rs. 9,990
  • The launch event is set for July 25
  • Bookings will begin from July 26

After dispatching 5,000 units of Freedom 251 smartphones priced at less than $4 to those who had booked the device in the cash on delivery (COD) mode, its Noida-based maker is ready for customer feedback and its next big bet: HD LED TV.

According to Ringing Bells CEO Mohit Goel, the firm has booked a sports stadium in Noida where the world’s cheapest HD LED TV – at Rs 9,990 – will be unveiled in the presence of Bollywood personalities.

“On July 25, we are organising a big event in Noida where the star cast of the upcoming film Dishoom – John Abraham, Varun Dhawan, Jacqueline Fernandez and Akshaye Khanna – will join us for the HD LED TV launch,” Goel told IANS on Tuesday.

Bookings for the 31.5-inch HD LED TV will begin from July 26. The delivery of LED TVs will start from August 15.

Before the mega event, Goel will personally distribute nearly 200 Freedom 251 smartphones in his home town Garhipukhta in Shamli district, western Uttar Pradesh.

“I am planning to go to Shamli on July 14 to hand over 200 Freedom 251 units to those who booked the device from these areas purely because of the emotional connection as I hail from Shamli,” he told IANS.

According to Goel, the company has received nearly 48,000 fresh booking orders for the newly-launched four feature phones, two smartphones and three power banks last week.

“These customers will also receive their units on cash of delivery (COD) mode. I expect the booking numbers to rise many fold in the days to come,” he added.

The four feature phones are available under the names of Hit (Rs. 699), King (Rs. 899), Boss (Rs. 999) and Raja (Rs. 1,099).

The two smartphones – Elegant 3G and Elegant 4G – are available for Rs. 3,999 and Rs. 4,999, respectively.

The company said it has tied up with RV solutions Pvt Ltd for the distribution of the devices.

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Tags: Freedom 251, HD TV, Home Entertainment, India, LED TV, Ringing Bells, Televisions

App Annie bets on Southeast Asia, India to capture smartphone surge

App Annie—derived from App Nanny, to imply it takes care of all things app—is mostly unknown outside of tech circles yet counts the biggest names in the industry among its customers.App Annie—derived from App Nanny, to imply it takes care of all things app—is mostly unknown outside of tech circles yet counts the biggest names in the industry among its customers.

Singapore: A Singaporean shophouse may seem an unlikely symbol of Asia’s mobile boom. Yet one muggy evening in March, about a hundred people packed App Annie Ltd’s new and larger offices to mark its plan to capture data on millions of new smartphone users.

The start-up will triple staffing at its office in Singapore to 25 people this year as it targets new customers in India and Southeast Asia for the data it compiles on apps, how often they are used and the revenue generated. That’s being bankrolled by a recent $63 million funding, which also helped pay for the soiree attended by executives from the industry’s biggest names: Google Inc., Sequoia Capital and Zalora among them.

App Annie is going where the demand is. Spending on mobile apps in Asia is expected to surge 24% to $28.3 billion this year—double that of the Americas—as rising incomes spur smartphone use in markets such as Indonesia. With more than 150 workers in China, where the company got its start before relocating to San Francisco, the Singapore expansion will help it measure the users around the region who’re bypassing earlier technologies.

“Devices are getting cheaper and many consumers are experiencing their first Internet experience through an app in smartphone,” said Bertrand Schmitt, the company’s bespectacled 39-year-old founder. “Asia Pacific is already big and it keeps getting bigger. For us, that makes the region very exciting as a market. Revenue and downloads, growth are expected to be big.”

App Annie expects China to overtake the US this year to become the largest single app market with an estimated $11.8 billion in revenue. China is already the world’s biggest smartphone market while India has passed the US for second place.

The surging number of mobile devices and people going online through apps for the first time are fueling Asia’s mobile software arena, said Avinash Sundaram, a research manager for enterprise mobility at IDC in Singapore.

“Asia is a clean slate and there are no legacy systems people have to worry about,” he said. “So they have the freedom to create new business models, which is helping to drive this app economy in Asia.” He cited Tencent Holdings Ltd’s payments- to-voice messaging service WeChat as an example.

App Annie—derived from App Nanny, to imply it takes care of all things app—is mostly unknown outside of tech circles yet counts the biggest names in the industry among its customers. It competes with Yahoo Inc.’s Flurry and Apptopia, making money by collating data from different sources and then signing up clients for subscriptions of $10,000 to more than $1 million a year.

Game developers to sharing-economy players rely on its data and analytics to keep track of their businesses as well as their competitors’. Google uses App Annie’s services, as does Chinese search rival Baidu Inc. while other customers include Samsung Electronics Co., LinkedIn Corp. and Inc.

In favour

About one-fifth of App Annie’s customers are venture capital firms including Redpoint Ventures, according to Schmitt. They use the data to inform their investment decisions and avoid pitfalls as the global economy cools. Its own backers include Sequoia and Institutional Venture Partners.

Market trends appear in their favour. Consumer spending on mobile apps in the Asia Pacific region, home to more than half the global population, is expected to reach $57.5 billion by 2020, App Annie estimated in February. That’s more than half of the estimated worldwide consumer spending on apps of $101.1 billion.

In markets like India, the influx of smartphones priced below $50 is boosting adoption and downloads. In November 2015, average data usage per smartphone user in India and Indonesia grew by more than 50% on year, according to App Annie.

Longer term, the shift to a mobile-oriented economy is inevitable, he said.

“Every business is becoming an app business,” Schmitt said. “Because people are spending so much time on the phone, you need an app to provide a constant, connected experience for your consumers.”


Flipkart bets on large appliances to power next stage of growth

Flipkart started selling large appliances again in early 2014, nearly a year after it was forced to withdraw these products because of customer complaints about late deliveries and poor quality of products. Photo: Hemant Mishra/Mint

Flipkart started selling large appliances again in early 2014, nearly a year after it was forced to withdraw these products because of customer complaints about late deliveries and poor quality of products. Photo: Hemant Mishra/Mint

Bengaluru: India’s largest e-commerce firm Flipkart Ltd is banking on sales of high-priced products such as television sets, refrigerators and air conditioners to help the company maintain its sales growth trajectory this year.

Flipkart started selling large appliances again in early 2014, nearly a year after it was forced to withdraw these products because of customer complaints about late deliveries and poor quality of products. The company has set up a separate logistics network for the category.

Since early 2014, when it launched sales of TVs in Bengaluru, the company has added washing machines, air conditioners, microwave ovens and other products, and now sells these items to customers in some 6,000 pin codes across India.

In the Diwali quarter ended December, Flipkart sold nearly 500,000 units of large appliances, including 250,000 TV sets, said Amit Bansal, business head of appliances at Flipkart. This accounted for roughly a fourth of all TVs sold in India in that period, he said. The company expects to increase sales of large appliances by three times this year, compared with 2015.

“Over the next two years, (large appliances) is going to be one category that’s going to drive revenue growth for Flipkart. This category is built on customer service. The biggest lever we’re going to use is bringing down the cost of ownership, whether it’s offering high-end technology at disruptive prices or offering the kind of financial arrangements nobody has seen before,” Bansal said.

After the company’s bumper Big Billion Day sales week, some of the biggest consumer electronics brands, which were earlier hostile to all online retailers, entered talks to start selling on Flipkart, he said, but declined to name the brands.

In the past 18 months, many consumer electronics brands such as Sony, Videocon, Lenovo, Dell and Canon had warned shoppers against purchasing products on e-commerce marketplaces. However, as e-commerce became popular with consumers, brands are coming around to the reality that they can’t afford to be absent online.

“Diwali really shook up the market. It helped make brands realize that e-commerce is not just another channel, it could be the channel to growth. There is a shift happening in the mindset of brands. And we want to be the platinum partner of choice for global brands. Over the past few months, we’ve had discussions with a handful of global brands (that aren’t selling online) and things are moving in the right direction,” Bansal said.

For Flipkart, large appliances will be a key battlefront with arch-rivals Amazon India (Amazon Seller Services Pvt. Ltd) and Snapdeal (Jasper Infotech Pvt. Ltd). The average price in this category is more than 10 times that of other products.

“Consumer durables is a very interesting category for online and vice versa,” said Harminder Sahni, managing director at Wazir Advisors. “It’s standardized and branded so trust is not an issue and it’s crowded so consumers will want to compare products which e-commerce offers. This category will be important for Amazon, Flipkart and Snapdeal. Not only is it a high-ticket category, it is also not evolved online. While the three companies offer these products, no one has really cracked it. Customer experience is still not always great. So whoever is able to provide that will emerge as the winner.”

Sales of consumer durables in India are expected to touch nearly $21 billion by 2020, according to a July 2015 report by Consumer Electronics and Appliances Manufacturers Association and EY, a consultancy.

Large appliances is a nascent product category. The two biggest online product categories so far, smartphones and fashion, are already intensely competitive. E-commerce companies haven’t yet focused on sales of large appliances partly because it is particularly challenging to deliver these products quickly, consistently and in a viable manner. For instance, getting a 6-ft-high refrigerator or an air conditioner to a customer is far tougher than delivering a smartphone or a pair of jeans.

Bengaluru-based Flipkart, which is valued at $15 billion, is leading the growth of large appliances among e-commerce firms. Its dedicated logistics network for this category helps the company deliver a majority of orders for large appliances in roughly three days. It claims to deliver some 97% of orders within the time it promised customers.

Apart from setting up a separate supply chain network for this business, Flipkart is getting brands to launch TVs, washing machines and refrigerators exclusively for its customers. Some products from brands such as Vu, BPL, Sansui and Whirlpool are available only on Flipkart.

The company also bought a large stake in Jeeves Consumer Services Pvt. Ltd, which provides after sales service for large home appliances and electronics, in November 2014. Jeeves provides installation, maintenance, repairs, product guarantees and after sales services on TVs, washing machines and other products.

“The biggest piece in large appliances that defines customer experience is how well you deliver the product and how well and quickly you can instal the products. With Jeeves we’re able to give a spot-on delivery time and a spot-on installation time to customers. Earlier, the installation turnaround time was 72 hours after delivery for TVs. Now, one in five TVs sold on Flipkart is installed at the same time,” Bansal said.