Expert_Opinion_
Don Marti
VP of Ecosystem Innovation
at
CafeMedia

Upstream metrics for Alphabet remain a concern

Alphabet faces an eyeball-minute shortage -- cutting R&D and increasing ad load are just short-term fixes. The share of consumer time spent with ad-supported media continues to fall (The Drum). 

But the main issue for Alphabet remains client platform competition. Apple is steadily increasing share of devices in use, especially in the US - (The FT) - largely through hard-to-replicate incremental improvements. 

For example, even low-end devices like the iPhone SE ship with an "overpowered" CPU to withstand the longer OS update support they receive. AppleCare+ can be extended indefinitely, and Apple's Buy-Now-Pay-Later offering will mean that now a platform that was already cheaper per year of usable life can be cheaper up front.

Meanwhile, Alphabet's Google Chrome browser and Android mobile platform are attempting three difficult and conflicting goals: catch up with user expectations on privacy and quality, keep antitrust regulators happy, and preserve Alphabet's ability to monetize low-engagement and brand-unsafe content. That's one too many to achieve realistically -- they will need to pick two and focus on moving share of devices in use up.

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Related_Wire_

Alphabet Q3 Earnings Report +6,1% YoY Revenue Growth, Net Income Down -26.5%

Earnings
October 25, 2022
Primary Source
Earnings Report