Google’s Hardware Game

Google. It takes a lot of effort on one’s part to not be able to recognize that name. It is, as most people around the world would say, a software giant that powers our mobile phones and internet surfing browsers. Arguably, it’s the single most important addition to our daily lives that has overhauled the way we perceive things in the 21st century. Google, however, is far greater than just a software giant. Over the years Google has tried numerous ways to burst that ‘software only’ bubble and has tried to compete with likes of Apple and Samsung on the hardware front.

Despite its desperate attempts, Google has worked on a lot more projects that have failed to make it big in the market than the ones that have. However, those failed attempts have never stopped Google from trying.

Google has always gone about creating hardware in three different ways: partnerships, acquisitions, and in house efforts. Furthermore, the line ups are really confusing, to say the least. Though it has never enjoyed success at either, it has always benefited from all in the grand scheme of things.

Google considers companies like Samsung both partners and competitors. In other words, it helps them on the software front but competes when it comes to selling physical devices. For instance, the phone that really kicked off the android fever was Nexus series. Nexus was a partnered project that Google carried out with Samsung. While Google provided and refined the platform for developers, Samsung was asked to take care of the physical components that go well with the platform. Even the first phone that brought android in the eyes of the consumers was a partnership of Google with Motorola. Google has enjoyed a greater share of success with these partnerships than any of their other forms of hardware making business. The result of these partnerships is that Google perfected the art of delivering a platform for mobile companies as per their need. The chain of developers it empowered made Android a clear winner when it comes to operating system.

The next thing Google started to do was to acquire hardware companies.

It acquired Motorola, their long-time mobile phones partners, in 2012 for $ 12.4 billion as solution to their mobile phones business. However, the acquisition turned out to be a big mistake. Google couldn’t keep up with the vast share of phones Motorola produced and it didn’t really fit their vision. Google ended up selling Motorola to the Chinese tech giant, Lenovo in 2014 for $ 2.9 billion.

It then acquired some portions of HTC in 2017 for $ 1.1 billion. It revamped HTC to power its own brand of phone Google Pixels. Furthermore, Google acquired Nest Labs in 2014 for $ 3.2 billion with a vision to produce next generation smart home gadgets and renamed it to Google Nest. This was followed by acquisitions of Fossil and Fit bit to enhance their smart watch game. There’s a pattern to it, take my words for it or see for yourself.

Google sees potential and capability of their software to surround numerous hardware devices that they think they could not produce on their own. The solution they have for the issue is to acquire budding hardware companies that specialize in those devices, enhance their software to fit needs of the respective devices, and sell those devices under their own brand.

The next step after acquisitions for Google is to develop in house environment to incorporate the acquired hardware with their kitchen-built software. An excellent example to this technique would be Google Nest.

Google has poured stacks of money to stitch together this excellent looking system of partnerships, acquisitions, and in-house efforts. However, even after all these efforts, their product line is messier and more confusing than ever before. The numbers support this claim.

Then why is Google persisting to be in the market that has resisted their involvement time and again?

Well turns out, it’s not about the hardware at all. It has never been. It’s about the data that those devices collect. It has always been that way. You see Google makes vast majority of its revenue from its advertising business. Google AdSense as they call it. This explains why its hardware is not at par with that of its competitors. It’s because it simply doesn’t care.

The sole reason for the existence of Google’s devices is to collect data from us and sell better ads to us. Ads that are more relevant to us. Ads that directly target what we want. The devices from Google simply enables it to fabricate a profile based on our user preferences and that leads to more accurate ads. Ads, which make the users feel right at home with everything from Google around them.

With devices produced by itself, Google won’t have to rely on other manufactures for the data. That’s what the push is all about. To collect data in the primary form and reduce dependence on other competitors.

Google wins no matter what. Even if it doesn’t have the greatest hardware line.

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