Earlier this week Google announced its new Pixel phones, and as part of that they also unveiled their own application processor (AP) chip for the phone, which they call Tensor. Here is a link to the Twitter thread introducing Tensor. At this stage, we know very little about the chip. A few details surfaced in the press, but the whole thing leaves us with more questions than answers.
We just published a look at the AP industry yesterday, so to keep it simple – the AP is the chip that makes a smartphone “smart”, it runs the operating system and all the apps and other software on the phone. This is a crucial part of the device, and one of the only ways left for smartphone makers to differentiate their devices. Apple appears to be crushing the market on the back of its industry-leading A Series APs, and many others are trying to build their own solution. But why is Google doing this?
Google’s Pixel has always felt like an aferthought. It is a way for them to show off the full capabilities of Android, a benchmark against which we can measure other Android phones, but it has never been a truly commercial endeavor. IDC reported that they sold 7 million Pixels in 2019, and 2020’s model was probably lower. This is rounding error in the 2 billion units a year mobile market.
So maybe Google is going to get serious about promoting Pixel this year. This strikes us as unlikely as that would put them in competition with all their partners, the smartphone makers, who drive a lot of traffic to Google sites (which is the whole point of Android after all). It seems unlikely that Google wants to anger companies like this while it is in the middle of multiple anti-trust fights all looking at their practices around Android.
Maybe Google will instead sell Tensor to other handset makers. This could be huge. The other vendors badly need a good AP, especially one that can handle all the AI goodness that a phone called Tensor from an AI-first company like Google can offer. If true, we would be very wary. Google does not have a great track record when it comes to sustaining products. To make this work, any handset maker who wants to use this for their phones would have to believe that Google has a multi-year roadmap, one which they will truly commit to delivering. Running a chip business is a lot of tedious work, little of which can be entirely automated. Serving these customers would require a lot of work that is very far from Google’s core competencies.
On Twitter someone pointed out to us that the Tensor is most likely to be used in Google Chromebooks, which sell in much larger quantities than Pixel phones. This makes sense, a phone’s AP should be powerful enough to drive a Chromebook. On the other hand, the same logic as above for phones applies. Google only sells a small portion of Chromebooks itself, the others are sold via the brands that design them like HP and Samsung. Those companies may want find that using a Tensor chip has advantages, but they are going to weigh all the standard commercial considerations before going down that path, and high up on that list of questions has to be the longevity of the Tensor product line.
Which leave us with why we really think Google built Tensor – because they could. Google has a pattern here. They have incredible engineers with time on their hands. This is not the first, not even the 100th time they have rolled something out with incredible features that had no clear business case. Google has built a very strong chip design team and they have ironed out the production back-end to facilitate this. This means the cost for them to design a new chip is very low. We wrote about how this can go well and how they likely have some important tools in place to build more chips. So we should not be surprised that they are deploying these now in mobile.
This does not mean a revolution is coming to smartphones. As interesting as Tensor may be (and let’s not forget we have no idea how well it performs), as capable as Google’s engineers are, we think it is unlikely that Tensor is going to shake up the industry. We think you cannot rely on Google to stay in this business.