Samsung's Virtual Assistant Will Be a Flop

By Markets Fool.com

Google Pixel. Image source: Google.

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Just last month, South Korean giant Samsung scooped up artificial intelligence start-up Viv Labs in a move that was clear evidence that the company would soon release a virtual assistant. Viv was started by the same entrepreneurs that created Siri, Apple's (NASDAQ: AAPL) virtual assistant that was officially relaunched under Apple's umbrella half a decade ago. Well, Samsung has now confirmed that it plans to launch a virtual assistant in the forthcoming Galaxy S8 that's set for release in early 2017. Samsung also hopes to integrate the virtual assistant across other product categories, including home appliances.

The Samsung assistant will allow third-party developers to integrate and build upon the platform, and says it will be "significantly differentiated" from Siri and other competing services like Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Assistant. The company sees a virtual assistant as a shot at redeeming itself following the Galaxy Note 7 debacle, which tarnished the Galaxy brand and crushed mobile profits in the third quarter. Mobile operating profits were effectively non-existent last quarter due to the global recall.

Samsung has never been good at software

Introducing a virtual assistant will be but the latest in a long string of attempts by Samsung to improve its software capabilities. Aside from the Note 7 issues, Samsung has earned a strong reputation over the decades for hardware, but knowing that hardware is inherently vulnerable to commoditization, the company has attempted to differentiate many times with software. Android gives handset makers enough flexibility that they can add all sorts of software on top (for better and for worse).

Despite numerous attempts over the years, Samsung hasn't really succeeded in creating compelling software and services that set it apart from its hardware competition, and it's safe to say that consumer perceptions remain grounded in Samsung's hardware prowess. That's precisely why the Note 7 disaster is so terrifying for the South Korean company -- it undermines its biggest strength.

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Google's will always be better

It won't just be about competing with Apple, either, which admittedly has also been historically weaker in software and services relative to Alphabet. Siri was the first major virtual assistant to hit the market, and still feels underwhelming in practical use. No one buys an iPhone to get Siri.

But Google Assistant looks extremely promising, including its conversational interface and ability to recognize broader context. However, Google says that it is keeping Google Assistant as an exclusive for its new Pixel phones for the time being (along with other benefits like unlimited full-resolution cloud photo storage). That won't be the case forever, as it's in the search giant's best interest to make Google Assistant as widely available as possible, and the company told TechCrunch that it would work to support additional devices going forward.

So within Android over the longer term, Samsung's greater challenge will be to compete with Google Assistant. After all, one of the many appeals of Android is that so many core functionalities come included, so original equipment manufacturers don't have to worry as much about providing these types of services on their own.

Samsung's assistant will likely suffer the same fate as its other software forays: best remembered as an attempt to differentiate but ultimately overshadowed by Google.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A and C shares) and Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.