If you were impressed with Google’s line up of product launches yesterday – from the Pixel smartphone to the 4K-ready Chromecast to Google Home smart speakers – you haven’t see the best (or worst?) of it yet.
The biggest reason for Google making its own smartphones is obviously to leverage the power of the Android operating system in ways that were never before possible. Without the “middleman” represented by hardware manufacturers, Google can release quick updates and a seamless experience on Android using the Pixel as the vehicle.
But the real purpose of having a device is so they can control the ecosystem on the device. Default apps are sure to be whatever Google makes – Google Play, Android Pay, Google Search and so on. In a sense, you are the end product because that’s where the money is ultimately coming from. The devices may generate billions in sales for Google, but a device is a one-time purchase not likely to be repeated for another two years at least. What they’re more likely to be after is the steady ad revenue that users will generate when they browse the web using Google Search; the money they make on Android app commissions; and so on and so forth.
With Google Home it’s the same thing. They want you to use Google Play Music, they want you to subscribe to YouTube Red (they’re giving a free subscription with every purchase, by the way) and they want you to stay within the confines of the ecosystem they’ve created.
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Is this a bad thing? Absolutely not. Every company does it, and while that’s not a justification in itself, it is a validation that this is the only way tech companies today can stay relevant in a world that is becoming increasingly disruptive.
Will Google ever compete and beat Apple’s iPhones? I don’t think so. They’re too far behind in the devices market to reach Apple’s stature. But it’s not impossible. With more than 80% of smartphones running on Android and the new Pixel being launched to critical acclaim (thus far), they’ve certainly begun the race. It remains to be seen how effectively they can leverage their brand name on these devices and sell them in the tens of millions like Apple does every year. But Apple has already crossed 1 billion devices barrier this year since the iPhone was launched nearly 10 years ago, so it’s not likely that Google will catch up to them any time soon.
But on the ecosystem front, Google already has a massive, massive user base that is hooked on to its products. YouTube, Android, Search, Sites…the list goes on. More likely than not, they will use the hardware side of things to boost their advertising and related revenues to even greater levels. Hardware sales will just be the bonus benefit they receive, not the goal in itself.
It’s still early days to call the Google Pixel and Google Home, among other products, huge successes. Both products have some very cool features and both are obviously piggy backing on other companies – the Pixel on the iPhone’s back and Google Home on Amazon Echo’s – but whether or not they’ll stand strong in the market on their own right remains to be seen.
In the meantime, Google wants YOU. You’re the real asset they’re after. You’re the one generating revenues to the tune of tens of billions each year. And you’re the one that’s going to take them to the next level. Google Pixel and Google Home are just the means to get you to take them there.
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