Why Google Struggles With Hardware

Why Google Struggles With Hardware


Our mission is to bring a
more helpful Google for you. Google’s hardware business
is really confusing. It means creating
products like these. They’re like history, so confusing. You can almost like put
funny music to it. It considers companies like Samsung,
both a partner with services like Android and a competitor with
hardware like the Pixel 4. It has branded devices under Nexus, like
the Nexus One and Nexus Q, Chrome, like the Chromebooks and Chromecast,
Pixel, like the Pixel 4 and Pixelbook Go, Nest, like the Nest
Home Hub and Nest WiFi, and its own name, like the Google
Home and Google Glass. And only a few of these products
have gone on to take a successful share of their respective markets. Google’s a real hardware competitor
in some markets, especially when you think about education and
laptops with its Chromebooks. But in general, as a player against
Apple and Samsung and phones and other places, it’s not considered a
major player in this space. For a company with an
almost $900 billion market capitalization, Alphabet, Google’s parent company, just doesn’t
make a lot of that money from its hardware. But through acquisitions, partnerships,
internal design and developments, Google has stitched together
a product line that makes the company’s complete vision
hard to see. So if the company can’t rely on
hardware as a major source of income the same way Apple and Samsung
do, what is Google’s ultimate goal? The hardware’s true sort of value is
the fact that it helps Google collect information that can be used
for advertising and then to serve you ads anywhere
you might be. I don’t view Google as a hardware
contender because at its core it’s an advertising company. It’s easy to miss Google’s hardware
strategy in its current lineup. Google says it wants to create
products that can exemplify Google’s software and services like Android,
Chrome, Google Assistant and others. But let’s be very clear. Google is not a hardware company. Of its $38.94 billion revenue in quarter two
of 2019, only about 16 percent came from Google’s so-called
“other revenues” category, which includes Google’s hardware sales, Google
Play sales and cloud revenue. The vast majority
of that $38.94 billion income comes from
its ad business. Google captures 20 percent
of all U.S. ad dollars, both online and
offline, and a whopping 74.6 percent of all U.S. search ad dollars. The hardware business has to serve the
rest of the business, which is an advertising business. Where it’s collecting profiles, it’s
collecting data on you. Looking at its history, Google has tried
hard to clean up its product line, like Steve Jobs famously did when
he returned to Apple in the 90s. But it’s still
struggling in general. Google creates its hardware in
three ways: through partnerships, through acquisitions and through
its own in-house efforts. Google’s first big hardware partnerships
were thanks to its operating system, Android. When we talk about flagship best
Android devices, the Motorola Droid was really probably what put Android
on the map in the consumer’s mind. In fact, to this day when
people talk about Android, you still hear them refer to it as droids. It wasn’t the first Android phone, but
it was the first Android phone that got a tremendous amount of
attention and drove a tremendous amount of sales. But the Nexus line
of phones signified a change in the way Google looked at hardware. So the Nexus line was originally
developed, sort of showing what you can do with an Android phone
with the latest version of Android. It was for developers to build their
apps for the platform so that partners in the Open Handset Alliance
could then launch phones based on that. The Nexus One only sold
about 20,000 units in 2010 compared to Apple’s iPhone 3GS,
which sold 1.6 million units in the same year. The next hardware for Google to
tackle was the computer itself. Chromebooks used to be laptop-like
internet terminals that Google developed during its shift to
cloud-based computing and storage. Originally, these laptops just accessed
the internet via Google’s Chrome browser, nothing else. Everything was stored on Google’s
servers, even the applications. The hypothesis is that you were
always connected because at the time when they first came out, there
was very little storage on the device. You had to be connected
for it to do everything. The first Chromebooks were manufactured by
Samsung and Acer and got the products off to a rocky
start, leaving reviewers wondering why Google made these
glorified netbooks. But by 2016, Chromebooks were outselling
Macs, thanks in part to their popularity in schools. In fact, Chromebook took 60
percent of the U.S. educational market share by 2018. It was in 2012 that it really decided
to want to put a lot of money behind hardware. It acquired Motorola Mobility
for about $40 a share for $12.5 billion, marking a
huge investment in Google’s hardware strategy to build its own phones,
instead of partnering with other people to build its phones for it. In a blog post, then CEO Larry
Page said the combination would offer consumers accelerating innovation, greater
choice and wonderful user experiences. The biggest value that the company got
out of it was its patent portfolio so it can go
toe-to-toe with companies like Microsoft and Apple. Then in 2014, CEO Larry Page decided
they wanted to get out of the mobility business and ended up
selling Motorola Telenova for $2.9 billion, which was vastly less
than what they paid for. $9.5 billion less to be exact. I can only classify the Motorola
acquisition as a complete bust. One of Google’s most lucrative investments
was in the company Nest, which was originally acquired by
Google’s parent company, Alphabet. That was sort of the start into
this home hardware foray and at the time it was just
a smart thermostat. I mean, how many houses do you
walk into or apartments where the Nest is the featured element? With its eye still on the
hardware prize, Google announced in 2017 that it would spend $1.1 billion on a cooperation agreement
between itself and longtime partner HTC, a company that
previously developed several Nexus phones and even manufactured a
few Pixel models. I believe this was a reaction
to post, spinning off Motorola, realizing they didn’t have enough
of their own employees or contractors to do what they needed to
do, and they just they needed experienced bodies. Google acquired about 2,000 HTC employees,
many of whom worked on the Pixel team while at HTC,
and the acquisitions continued. In 2018, Google decided to absorb
Nest fully into its own lineup, making it no longer an
independent company under Alphabet. In 2019, Google closed a $40
million deal with watch group, Fossil, and most recently, Google
acquired Fitbit for $2.1 billion. For smaller, more niche
projects, Google turned inward, like with Google Glass, which
was a wearable device. Kind of goes down and is infamous
for not really making much of a breakthrough in the market like
the company had hoped. Glass was advertised as a pair
of augmented reality glasses that could provide users with turn-by-turn
directions, read messages and emails and take
pictures and videos. But the real-life functionality was much
more limited due to its small battery. I personally went out
and bought Google Glass and I was pretty sure at the time
it was going to revolutionize everything. The product was such a flop
that adopters of the glasses were referred to as “glassholes.” Google really didn’t understand the
personal ramifications they would have on its users. That was very negative. Google discontinued the product for consumers
in 2015, but they live on in the workplace. In 2016, it decided to reverse
course again and it made another aggressive stride into hardware. This gave way to incredibly successful
products like the Google Home, which was the most popular smart
speaker lineup in the United States in 2018. I think Google’s best
performing device is likely the Google Mini. And with this new Google-centric
frame of mind, the company nixed Nexus to create its very
own Pixel line of phones, Chromebooks and tablets. They’re not co-branded with
people like Huawei or LG. The Pixel phones have been critically
acclaimed, but pulled a dismal 2.25 percent of the smartphone market
in North America, less than Samsung, LG, Huawei and
even former subsidiary Motorola. I think when you see Google
Pixel commercials and see the YouTube videos with millions of views, you
might get the impression that this is a huge phone and has a
very vocal and dedicated fan base. But when you look at shipment
figures around the United States particularly, it’s not even among the
top five, although we’ve seen in past years that
the Pixel is growing. So besides products like the Google
Home Mini, now the Nest Home Mini, why would Google continue to
sell hardware that is failing to bring in big bucks?
The unspoken interaction or contract between the consumer and Google
is that I’m going to make these devices do amazing things, I’m
going to know things about you so it’s going to do things that I
know you wanted to do and then we’re allowed to advertise
back to you. Google knows a surprising
amount about you. Whether you’re using an Android phone or
just use a bunch of Google apps like Google Maps, Gmail, YouTube
and Chrome, Google has built a profile for you that includes
a lot of information. Google knows that I
don’t have kids. Google knows that I work for a
very large employer that has more than 10000 people. Google knows that I’m
a renter, not a buyer. It does know some details that
you probably know that you’ve never sort of explicitly told them, but
it’s inferred these things through all of your behaviors on Google. Google uses this profile to provide
you with more accurate search results and the like, but more
importantly, it uses that info to serve you targeted ads. Obviously, there’s these Google Homes,
there’s these smart home sensors and all of these things
are also collecting data on us. They also say that all of this
collection is to just make your experience with their
products easier. So they want to be really relevant. They want to be fast. They want
to know that when you’re talking to your home device that you want things
that are in your town or if you’re asking for, you know, a pair
of shoes that they’re going to give it to you and your size. And Google isn’t shy about the information
it collects or how it uses it. Just check out Google’s
privacy and terms page. It has a video
explaining all of this. So it’s very easy to find all
of this information and see what they have available about you. And it’s very easy to opt out. There’s a little button that says,
“turn off my ad targeting.” It’s very easy to do that. It’s a little less easy to
understand from a third-party player perspective what information they have
collected that has now gone out to these third party players. The network is
probably extraordinary. Now when it comes to software,
there are few that rival Google. Android holds a huge majority of
the smartphone market worldwide, and Chrome OS currently powers more than
half of the mobile computers in U.S. schools. When you look at phones, Android’s
the real winner here, not necessarily Google Pixel. When you look at laptops, it’s
Chrome OS made by Google’s partners, not necessarily
Google’s Pixelbooks. But when it comes to putting that
software in every nook and cranny of your life through hardware, it
gets a bit worrisome for consumers. It still has issues that
it has to overcome. It has to convince consumers that
it’s actually serious about making technology and being in
the hardware space. It also has to convince consumers that
they can trust them with being in the most personal areas of
their lives and having hardware that will protect the user’s
privacy and security. It’s hard to say exactly what
the future will be for Google’s hardware business. But one thing is
for sure: if you’re using a Google product, you are helping
Google sell you better ads.

100 COMMENTS

    I bought pixel first version. It bricked after 6 months. Switched to Apple. Working device is more important than cool features

    I’m not surprised that their hardware isn’t catching on. Even their main business…bing a search engine…doesn’t really work very well.

    And I’m sick and tired of all of these companies making money with everything I do online. I’m tired of the invasion of my privacy by these companies.

    Products that record, tape and get into you and everyone you interact with's personal life….. Globalist junk.

    Google's spinoff of Motorola Mobility was anything but a bust. Moto's main value was in its patent portfolio, which Google kept. Moto was one of the three major patent holders – the other too being BlackBerry and Nokia. You forget that most of these patents were related to "wireless communication", not mobile phones per se. They have continued serving Google long after the spinoff. Yeah they probably should've also kept some experienced hands so that they would not need to rely on HTC, but that is one misstep, if at all. No way is this a bust.

    because that's it. they're a robot advertising company. people go to apple or other companies because they offer HUMAN services like customer support and email responses. it's been 6 months since I sent in a lost email inquiry to google and I haven't gotten a response, not even acknowledgements.

    To answer the question in title – Google makes hardware (although sometimes half baked) to showcase the capability of products that can be made with Google’s services. It never intends to sell billions of units under its own brand but to get the ball rolling so that other players can also manufacture hardware with Google services which ultimately results in more data for Google and in turn more ad revenue.

    Google has a very bad future proofing, with most of their apps seen the end, even the hardware will go through the same fate.
    I would suggest them to keep it in development and then release it to the public or integrate the new apps or new hardware into existing line. Rather than creating a new line.
    This causes less confusion to the public or the end user.

    because they dont sell their phones internationally, i can't buy google pixel on my local stores in indonesia because google dont sell their phones to indonesia so i must buy import from ebay or amazon.

    This video failed to mention that Google was only interested in Motorola's patent library but couldn't buy that outright so instead bought Motorola mobility then sold what they didn't want.

    They make the wrong hardware sacrifices, bad exclusivity deals with Verizon. The lack of a cohesive hardware strategy. The unwillingness to make premium hardware in spite of their OEM partners. Lackluster hardware design.

    Hardware is a money pit of sorts, you have to keep them updated etc. Apple is not competing with its self and Samsung have the means to invest, since they have a longer history with hardware than Google.

    The reason I will never buy any google product, is the fact that they spy on you! From their laptops to their phones and the fact that they work with the NSA to spy on you.

    Easy fix. Stop half a55ing it. It's supposed to be a flagship. Put flagship parts in it. As big a battery as you can fit. Make sure the processor can handle 4k 60. If it says 90hz refresh, make sure it's all the time. Samsung gets it. Give them everything and they'll stay for most. Even if the pixel was cheaper it still wouldn't sell because there are already better alternatives at that price.

    Google pixel 4
    " don't worry, I'll be looking at you before you even touch me"
    That's exactly what Google did.
    Why would I want to pay for out-of-date hardware just to get spy on.

    In my opinion the reason Google struggles with hardware is two reasons:1.)they over charge for what the device is capable of vs similar products and 2.)they struggle with optimizations

    This video is sort of wrong. The ACTUAL reason why Google hardware has suffered is simply this: the products don't offer enough features for the right price. Most consumers don't really care about Google's data collection; only a vocal minority do. Some of Google's phones have done well, at least with enthusiasts (like the Nexus 5, or the Pixel 2 XL), because they were good devices – they offered great features for the price. The same with the Google Home Mini, or the Nexus 7, or the Chromecast – they've sold well because they were cheap and offered great features for the price. But other devices haven't been as good, like the Pixel 4 and its small battery, or the Pixel 3 XL's massive notch, and both of those devices were priced highly, so they will have suffered for those reasons.
    Another factor is marketing. The Nexus 5 was a popular phone with enthusiasts because it was a good deal, but a lot of "normal" consumers may not have even known about that phone, because it wasn't aggressively marketed in the way that the Motorola Droid was, in the way that Samsung phones are (I remember seeing the Galaxy S10 adverts on TV earlier this year countless times), and in the way that Apple phones are.
    So yeah. If you want a device to be popular with enthusiasts then you need to provide a great device at a great price; and if you want to sell a lot of units to the mass market then you will probably need marketing too. I don't think the trust issues around Google are actually a massive factor that influences whether people buy their hardware products or not (especially since all other Android phones really have the same privacy issues). The main factors deciding whether consumers buy Google phones are features, price, and mindshare.

    Here I am watching a video about why Google struggles with hardware, about to criticize Google on a YouTube comment that I am sending through Chrome, all while on a Chromebook. Like that ebonics quote, "It really do be your own sometimes."

    how can you mess this up?? just put the latest and greatest hardware out there.. you dont have to be so unique, being "google" and having stock android is already enough to set you apart from competition..

    To say that they use hardware to collect information is wrong, because Android is serving that purpose. An exception is Google Home products.

    The problem is that it just spends too much on R&D like apple. when it needs to DO A CHINA, just have good specs and keep it cheap like One Plus is doing.

    Give it some time, more and more people will become less zombified to iPhone and come to Android. The Pixel is still a newer device.

    They obviously have the Home/Nest stuff well set. But look at the Pixel 4, Pixelbook Go and Pixel Buds 2, Google is this close 🤏🏼 to finally nailing their hardware lineup, the designs are all finally up to date and unique. If Google can cheapen their product line, specially the Pixelbooks, and finally catch up in HW specs they will finally be set to take off with aggressive marketing. Specially as iPhone's and Galaxy's are getting a price hike next year for adding 5G across the board there will be space for a no compromise 128GB/8GBRAM $800 Pixel 5 and $900 5XL to sell like hotcakes.

    If there was someone at Google with some vision for the hardware division, this wouldn't have happened. I don't know how many realise this but Google already has what it needs to take on Apple. They've hot great hardware, great software but they always screw up with the Pixel. It's really a shame that there's no Pixel smartwatch in 2019. Google needs to build a Pixel ecosystem to give a real fight.

    Google did not provide a backup and restore option in Android – like we keep using the same phone for 10 years or something.

    Because they refuse to make the hardware in-house from scratch. I'm a Android fan but I'm slowly switching over to apple

    5:48 How do you lose $9.5 billion dollars in a 2 years? Larry Page is literally the dumbest person on earth! A majority of people watching this video could've done a better job as CEO.

    I tell ypu wjy people didnt buy the Pixle. They said it was going to be cheap. I think around $300 and either they lied or really lost control of the budget. Either way, they let the consumer and themselves down

    When you outprice yourself on your phones, and "upgrades" people don't want…. that will drop the numbers drastically. They had a good thing when they put out mid priced phones that competed with the other phones, but at half the cost.

    Why is it that this people think that because google's products are not selling fast they should leave the industry , even the best selling products started slow

    Everyone: Google sucks at hardware.
    Meanwhile at Google: We have built the worlds best quantum computer muwahahahahahaha.

    When I bought a chromebook 2 years ago for business use, Google gave me 100 GB of storage for free. At the end of 2 years, they took away that 100 GB. It is like you received a gift and then giver would like the gift back in 2 years. Never again, no future devices from Google for me.

    People need to understand the structure of the company. Google's structure isn't confusing.

    The "Made By Google" team is the not the same team that develops ChromeOS, AndroidOS, Nexus, or Google Glass. The "Made by Google" team only have created hardware that has literally been 'made by Google'. This includes, Google Home, which was rebranded to "Nest" because it's a better name than "home", Google Pixel and Pixelbook Go.

    Another good example is Vox Media, The Verge, Curbed, SB Nation, and Recode. They're all owned by Vox Media, but they have different teams for different things. The Verge for technology, SB Nation for sports, etc.. It's not that hard to understand.

    Google never designed any of the Nexus devices. They were a partnership with other Android manufacturers. That's why there was always an LG, HTC, or Samsung logo on the back of Nexus devices. It's not that hard. Guess what logo is on the back of the Pixel and Pixelbook Go? A "G". Why? Because it's "Made by Google". It's really not that hard to understand. 😂

    Google makes phones like the pixel because they make Android. First of all the devs have their own hardware they can work on. They always get updates and the newest features first and because they have top of the line hardware it shows off what Android can do.

    What kind of additional information can Google collect on a Pixel phone that they cannot on a regular Android phone with all those Google services installed?

    I have only google products in my house including Pixel 3 and Chromebook, I've been using them for over a year and still love it, very high quality. I used to have always lagging iPhone 8 and Mac Book Air and that is real trash I am in real estate business and over 90% houses that cost $200k+ have a Nest Thermostat System installed, you can check it yourself on Zillow. What a FAKE news..

    This company has more data than any other entity on earth, some of the most powerful supercomputers an effective monopoly on search browsing and people really think “this is an advertising company”.

    😂 🅰️1️⃣🅱️

    Most people don't know the real story of how online video started.

    You-on-tv.com started it in the 1990's… nearly a decade before youtube.

    Checkout this video lecture from Pioneer Michael Lee Goetz, sr.

    http://you-on-tv.com/speech.mp4

    Insane .. maker and distributor of Android can’t come up with a proper phone.. 6th place .. take Apple that’s one but they should be number 2 .. cuz the crap, make a wow phone

    Wrong video title. All you do is layout how Google is failing with hardware but you do not go into the why they fail with hardware.

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