So, by google, what comes first in your mind? Either the search bar that you use daily or Gmail that keeps knocking on your phone with important emails. Google has been the most influential software company in our day-to-day life.
And, to give you an exact idea of how much Google has been dominating our lives, a report from Statcounter shows that, between April 21 to April 22, the majority of the united search engine market share was occupied by Google. About 87.43% of people have used Google as their main search bar, whereas other popular search engines such as Bing, yahoo, and duckduckgo have had 6.58%, 3.19%, and 2.4% of the audience, respectively. So, it seems people rely upon google over any other search engines. But in terms of hardware? We don’t think Google might want to discuss that. That is because Google has a wide range of hardware collections, and none of them is hugely popular. So, the question is, why does such a dominant company in software keeps struggling with hardware? In this article, we will be discussing the reasons behind google’s scrambling in hardware over the years.
For the year 2021, Google’s parent company Alphabet saw a huge revenue jump generating a massive $257 billion. This was almost a 41% increase over the previous year. And, no surprise, the maximum portion came from the ad revenue, whereas the hardware sale contributed only over $19.6 billion.
And, the hardware section consists of multiple brands as well. They have the nexus tablets, smartphones under the pixel branding, Chromecast, Chromebooks for the chrome lineup, and Nest, which offers various smart home devices. Even with all these combined, Google managed to generate only $6.1 billion in profit. That’s quite absurd, right? On the contrary, the ad revenue from different software and partnership alone makes Google, the most substantial company. While Google keeps trying harder to step up in the hardware market, it doesn’t seem to be enough or nowhere near. So, what’s pulling them backward?
First, Google has been competing with its own partners. They have provided the best operating system for Samsung, and yet have their pixel smartphone lineup to compete with them at the same time. And, how’s it going? Google hasn’t been able to get even close to what Samsung and Apple have provided so far. If you look at the USA smartphone market share, you won’t even find Google in the top 5 smartphone brands. A report from Statista shows that the top smartphone places are acquired by companies like Apple, Samsung, LG, and even OnePlus, but Google isn’t close to them.
Besides, with its very own tensor chipset, Google seems to have lost track completely. All you can get from the Pixel smartphone is the better camera quality, that too with better machine learning, And, obviously, the camera isn’t the only concern when buying a smartphone. Thus you have the answer.
Another tremendously failed product from Google was the Google glass. This was expected to revolutionize the industry with its augmented reality features. With the glass, you would get instant updates and also show directions to your preferred place. But people who used this product were considered the dumbest, also referring to them as “Glassholes”. So, you already can understand how flop of a product the google glass was.
Nevertheless, before even Google started building its smartphone, their primary strategy to enter the hardware market was either through partnerships with prominent companies or acquisition. A very few products were being manufactured by Google themselves. For instance, Google bought Motorola in 2012, and in 2017 they brought HTC to extend their hardware capabilities. And the company closed a $40 million deal with the famous smartwatch brand fossil, and completely acquired Fitbit for about $2.1 billion in 2019. Well, it didn’t just end here.
Nest used to be an independent company under Alphabet. And, Google decided to enter the smart home market by partnering with Nest. Later, in 2018, Alphabet merged Nest with Google making it no longer a separate company. Though Google announced some successful smart products under Nest, they weren’t as groundbreaking as the company would have expected.
Even with all these acquisitions, Google couldn’t emerge as a successful hardware company, what’s the point then? According to Patrick Moorhead, founder of Moor Insights & Strategy, – “The reason for Google’s hardware existence is to be able to provide leading-edge ways to gather data on the consumers who have it and to be able to build profiles and subsequently provide advertising back to them”. Meaning, Google has a profile of you even if you have used its apps such as Gmail, Google Maps, or any other devices. And the information google has is being used to provide you with the most suitable ads. Google knows your personal preferences, your favorite location, foods, and many more that you might not have expressed to them.
Ultimately, all this data helps them to generate the amount of ad revenue no companies can even think of. Google captures 20 percent of all U.S. ad dollars, both online and offline, and 74.6 percent of all U.S. search ad dollars. Apparently, the hardware section mostly works as a slave that helps for the growth of these businesses.
However, Google still has the potential to become one of the superior hardware companies. They have got the best operating systems and useful and accurate software, and by optimizing them properly with the hardware, they can be a commanding leader. With their recent google Pixel 7 announcement, which has a solid Aluminium Build and a beautiful watch with rounded glass, google sure looks laser-focused on their future.
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