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Alphabet's (GOOGL) Android Efforts Boost Google Services Segment

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Alphabet’s (GOOGL - Free Report) shares have rallied 26.7% in the year-to-date period, outperforming the Zacks Computer & Technology sector’s growth of 10.3%. The company is benefiting from strong Google Services segment driven by search, YouTube, Pixel and particularly Android. Hence Google is making continuous efforts to bolster its Android features.

This is evident from Alphabet’s latest user interface (UI) redesign for one of its Android apps, Google Messages. The redesign presents a full-screen "Select recipients" UI with five recent conversations, a search button and a contact list. Users can select multiple conversations, select profile avatars and share individually by tapping the "Next" FAB.

Alphabet further strengthened its Google Messages app with an upgrade that allows users to edit a Rich Communication Services message, enabling 15 minutes for typo correction. Users can edit the original message by long-pressing the pencil icon in the toolbar, and the original message can be viewed by long-pressing the overflow menu.

These efforts will enable Google to capitalize on growth opportunities present in the global mobile messaging market, which, per a Future Market Insights report, is expected to reach $443.53 billion by 2033, indicating a CAGR of 15.9% between 2023 and 2033.

Expanding Android Offerings Aid Google Services

Alphabet has been making concerted efforts to bolster other Android apps like Google Wallet, Google Maps and Google Photos, among others, in addition to Google Messages, in a bid to strengthen the Google Services segment.

Google recently introduced a new Notifications feature for its Google Wallet app. The Wallet app now has six notification categories, namely Tips, Purchases, Passes, Transit, Updates & Alerts, and Promotional Campaigns, allowing users to receive transaction notifications from Google Wallet directly instead of Google Play services.

Alphabet also announced a feature on Google Maps that shows entrances for buildings to some select users, addressing the issue of navigating to specific building portions on the map. This feature is aimed at improving the user experience and ensuring accurate directions for businesses or locations.

Alphabet launched a free version of Magic Editor for Google Photos, allowing Android users to manipulate images, resize, and erase parts, apply background pre-sets and select with tap, circle, or brush.

Wrapping Up

All the above-mentioned endeavors to bolster its Android app offerings will, in turn, boost the Google Services segment.

Strengthening the Google Services segment is expected to continue aiding Alphabet’s overall financial performance in the near term.

The Zacks Consensus Estimate for 2024 total revenues stands at $295.53 billion, indicating year-over-year growth of 15.2%.

The consensus mark for 2024 earnings is pegged at $7.60 per share, indicating a 31.03% rise from the year-ago figure. The figure has been revised upward by 0.5% in the past 30 days.

Zacks Rank & Other Stocks to Consider

Currently, Alphabet carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and Dropbox (DBX - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks’ shares have gained 30.6% in the year-to-date period. The long-term earnings growth rate for ANET is 15.68%.

Badger Meter’s shares have gained 27% in the year-to-date period. The long-term earnings growth rate for BMI is currently projected at 15.57%.

Shares of Dropbox have declined 22.6% in the year-to-date period. The long-term earnings growth rate for DBX is 11.44%.

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