How Apple Helped Create the Need for Google Pixel

How Apple Helped Google Create Google Pixel

In many ways, Apple was one big reason why Google developed and launched the Google Pixel line of smartphones. But I’m going to leave you to digest that thought while I sketch a background to that assertion.

Google’s hardware efforts in the smartphone market had, until now, been part failure and part success. The failure came in the form of its Motorola acquisition for $12.5 billion in 2012, and ended with the sale of the unit two years later to Lenovo for $2.91 billion.

The success part came in the form of hardware partnerships with Huawei, LG, Samsung and HTC for the Nexus brand. While Google actively participated in the development of the phones managing the designs, development and support, it offloaded some development and all manufacturing to third parties.

Google has now taken things up a notch with Google Pixel, building its own phones, hence the moniker #madebygoogle.

But what was the real reason behind Google making the Google Pixel?

The Hardware-Software Relationship

To understand this, we first need to understand the relationship between hardware and software. Though completely different beasts, the full potential of the one can only be realized by the capabilities of the other. And it works both ways: the best hardware won’t help if the software lacks the power to utilize it to its fullest, and the best software can’t run on outdated or non-compliant hardware.

That’s what Steve Jobs meant when he said: “People who are really serious about software should make their own hardware.” He was right on the button because the success of each depends on the effectiveness of the other.

And that is also why people are willing to pay a premium for the iPhone, because the quality is top notch. You’ll easily find people complaining about not being able to update their iPhone or iPad to the latest iOS version because old iPhones and iPads still work beautifully after several years.

In contrast, you’ll rarely find people complaining that their five-year-old Samsung can’t get on the Android 7.0 Nougat beta because you won’t find that many five-year-old Samsung phones that still run like new.

iPhones not only last longer, but they work much better than comparable phones of their age. Quality is top notch, and that’s because Apple is able to say in control of hardware and software. That’s the reason they’re also able to make sure that both grow hand-in-hand.

And that’s the trouble Google has been having. The Android ecosystem, being highly fragmented with so many modified versions suited to each smartphone maker’s needs, is barely under Google’s control.

The situation was better when they had control over the design and other key elements, but when you have third-party manufacturing to support your hardware development, it can never be the same as running your own show. You can outsource your work and have service level agreements, but it will never be able to match in-house development.

That said, neither the iPhone nor the Google Pixel are made by the companies that own them, strictly speaking. They design them, requisition the necessary components and have them assembled under their watchful eyes, but the insides as well as the outsides are made by a large pool of companies rather than built by the brand owners.

That’s a forced decision, but both companies are now more or less in full control over all aspects of their phones’ “farm to fork” product stages.

Google knew that it had to take this route to properly leverage Android, but there’s another reason that not many people talk about. And that brings me to the real meat and potatoes of this article.

The Horrific Implications of iOS Licensing

There’s a looming threat of a “what if” that continues to hang over Google’s head. Apple has thus far chosen to reserve its operating systems for its own devices, whether that’s iOS, macOS, tvOS or watchOS. With the success of Apple Music and Apple Pay, what if Apple decides to leverage its operating system know-how under a licensing arrangement for premium devices made by select manufacturers?

That might sound like a wild assumption at this point, but their revenue growth is under threat, iPhone sales have peaked, Apple is not likely to go the low-cost route on its flagship phones, device sales across the board have slowed down and they still have a long way to go before Apple Pay revenues can offset device sales in any meaningful way.

If Apple suddenly decides to go the licensing way with iOS, that would put the entire Android ecosystem under threat. Android currently dominates the mobile OS market, but what if a group of device makers strike a deal with the Cupertino giant to produce “authentic Apple-certified remakes” of the iPhone for developing markets?

Such a licensing deal would put billions into Apple’s coffers every quarter and give them a massive new market segment to exploit. In addition, it will give services like Apple Pay and Apple Music a huge boost on the back of iOS device growth. That could well happen if Apple decides to bundle iOS licensing along with their most popular in-house apps.

And that’s a threat Google is well aware of. On the one side they have very little control over how well Android does. The fact that it is open source would put them at a huge disadvantage if Apple starts to license iOS. On the other side, they didn’t have a device of their own that could leverage the true power of Android. Now they do, in the form of Google Pixel, but they’re barely out of the starting gate with it.

That, I believe, was Google’s biggest motivator in creating the Google Pixel and spending hundreds of billions of dollars promoting it all over the world. They needed to quickly expand their presence in the combined smartphone software-hardware space before Apple did something disruptive, like what I’ve suggested.

It will take years for Google to get to the sales level of iPhone or Samsung premium smartphones, but they’ve made a very good start and I, for one, hope they’re not going to treat this the way they treated innumerable moonshot projects in the past.

With a laundry list of applications under its banner such as Google Maps, Search, Email, Hangouts, Drive and so on, Google’s software game is as good as any other company’s and, in some cases such as Maps, they are way ahead of Apple. A proper hardware offering would support these services at a much higher level, and Google Pixel is one step in that direction.

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