What happened
Google parent Alphabet (GOOG 9.96%) (GOOGL 10.22%) might be an unstoppable powerhouse in online search, but its stock performance on Thursday was the opposite of strong. The tech giant's share price eroded by almost 2% on the day, due to some discouraging news regarding an important component of one of its hardware products. That decline was steeper than the 0.8% fall of the S&P 500 index.
So what
According to an article on tech industry site The Information citing two unnamed "people familiar with the matter," Alphabet is delaying the release of the first 100% customized chip for its Pixel smartphone, which apparently is code-named "Redondo" internally. The company had originally planned to roll it out next year, but instead the debut will occur at some point in 2025.
Currently, the phone's "brain" is a semi-custom chip -- the Tensor -- Alphabet's Google developed in partnership with Korean tech conglomerate Samsung. The article's sources said that Alphabet plans to change partners for Tensor, swapping out Samsung for contract chip maker Taiwan Semiconductor Manufacturing.
The Information added that Redondo did not meet its trial production deadline in 2022, after Alphabet cut some of its features.
Alphabet, Taiwan Semi, and Samsung have not yet officially responded to the article.
Now what
Hardware is, of course, not Alphabet/Google's main line of work. But that hasn't dissuaded the tech giant from competing in certain categories; mobile telephony is a natural extension of its business, as it is the entity behind the widely adopted Android operating system. So this setback is naturally disappointing for investors who were hoping for more -- and quicker -- success in the hardware sphere.
