Hardware by Google

Google recently announced a slew of hardware products at an event on Oct 4. You can view the full video of the event and the announced products here. In this post, we delve into Google’s history of making consumer hardware products and how this time things could be different.

A Brief History

Google’s foray into consumer hardware started with its first Android Phone, the G1 built by HTC for T-Mobile. Since then, Google has partnered with various OEMs like HTC, Samsung, Huawei for Nexus phones. While the Nexus phones have been good products that showcased the best of Android’s latest release, they have always been targeted at the tech-savvy consumer. They were never mass-marketed and sold in stores of multiple carriers. This limited the reach of the Nexus smartphones.

On the tablet front, Google released its first tablet, the Nexus 7 as a competitor to the $199 hit Amazon Fire which set a new price point for affordable branded tablets. The Nexus 7 build by Asus/Acer was immensely popular and did well but Google mysteriously did not build a low-cost follow up to the Nexus 7. Instead it went after the premium segment leader, iPad with its Nexus 9 and Nexus 10. Neither products made a big dent in the market.

 Beyond smartphones and tablets, Google made the ill-fated Nexus Q media player that was soon discontinued. It also attempted its hand at a wearable with the Google Glass which was a good idea whose time has not come. In 2014, after a few failed Android/Google TV experiences, it launched the Chromecast media player for an eye-popping $39. Chromecast took the market by storm and continues to be a big seller. Google recently disclosed that it has sold over 30 million Chromecasts. The Chromecast also represented the first hardware product that Google shipped in large volumes to great success in online and offline channels. Google recently added a Chromecast Audio dongle for $35 that WiFi/cloud enables audio receivers and traditional music speakers.

 More recently, Google announced a router platform with its first product, the OnHub. The $199 priced router competes with Apple Airport Extreme and other premium WiFi routers and promises easy setup and advanced performance management.

The new Google Hardware

On October 4th, Google took to the stage in the Mountain View headquarters and announced a bunch of hardware products targeting a variety of segments.

 Chromecast

For starters, Google launched an updated Chromecast, the Ultra that supports 4K for $69. For Chromecast users who would like to cast their 4K content from Netflix, Youtube and other sources, this makes for a reasonably priced upgrade. One interesting choice here is the inclusion of the ethernet port on the Chromecast Ultra given the heavy bandwidth demands for 4K content. This also means that cord-cutters who don’t have an ethernet port on the wall near their television sets would need to rethink their setup.

 Google WiFi

Google also launched their WiFi mesh product, the Google WiFi. With the increasing interest in mesh networked and intelligent WiFi solutions like Eero, Plume, Luma and more, Google launched a competitive priced product starting at $129 for a single WiFi endpoint. While it is hard to estimate the size of the market here, Eero seems to have struck a chord with customers who are willing to pay a premium for a better home WiFi experience. In the longer term, having multiple end points like OnHub, Google WiFi, Chromecast and Google Home (more on this later), allows Google to build a home ecosystem that could someday offer a unique and compelling experience when used together.

 Google Pixel Smartphones

Google launched its first set of Pixel phones- the Pixel and Pixel XL. The name change from Nexus to Pixel also represents a shift in Google’s smartphone philosophy where they aim to build a compelling product that competes with the iPhone and similar premium offerings. The Pixel starting at $649 is priced to compete not in the budget-friendly segment as past Nexus smartphones were but with the iPhone. According to Rick Osteroh, the head of Google’s hardware division, the components in this phone built by HTC to Google’s design are premium and warrant the higher price. Google also claims that the Pixel boasts one of the best smartphone camera’s in the market. And to show its software chops, Google is promising that the Pixel will offer camera and an overall photo management experience unlike any other smartphone in the market including free unlimited cloud storage of full res photos taken on the Pixel.

 By aligning itself with Verizon for the first generation of the product (while offering an unlocked version on the Play Store for all other operators), Google is limiting its reach. This could be a planned move that allows them to see the feedback for the first version of the product before building a global SKU that can be sold at stores by various carriers across the world. 

Google Home

Google provided more details on the Google Home product which it first announced at Google I/O back in May. Home competes with the Amazon Echo family of products and offers Google’s take on the smart home assistant. Google Home utilizes Google’s machine learning algorithms and its vast index of information to distinguish itself from Amazon's surprise hit, Alexa. It remains to be seen if Home can offer a rich far-field experience and a reasonable value proposition at $129 when compared to the recently launched Echo Dot at $50 and its bigger sibling, the Amazon Echo at $179.

 Google Daydream View

Finally, Google also announced its Daydream View VR headset at $79. It will work with the Pixel, the first Daydream capable smartphone and yet to be announced smartphones from partners. The View does not compete with the higher priced and richer VR experiences from Oculus (Rift), HTC (Vive), and Sony (PSVR). The runaway success of Google Cardboard and the Samsung Gear VR has shown that there is a market for entry level VR experiences enabled by powerful smartphones like the Pixel. If the View succeeds, it could lay the foundation for Google to democratize compelling VR experiences but at a much lower price point than the Oculus Rift, HTC Vive or Sony PSVR.

 Execution, Execution, Execution.

In the past, Google has been viewed as a software company that occasionally works with partners to build hardware. Why would this time be any different? A few answers come to mind. For one, this time around, there is a cohesive strategy around all the hardware launches. These don’t seem like one-off experiments but rather a longer term play at developing technology areas like smart assistants, VR and intelligent WiFi solutions. While search is still its biggest strength, Google realizes that it needs powerful and meaningful hardware to serve as a showcase and conduit for its powerful software. By partnering with a broad set of retail partners like Walmart, BestBuy and Target for a wide reach, they are showing a strong commitment to their hardware roadmap. And with their product core feature set, Google seems to be skating to where the puck will be.

 All the announced products look well designed and promising. All that is left is the execution. Google knows that it is going up against established leaders and strong hardware teams from Apple, Oculus, Samsung, Amazon and more. It needs to demonstrate to the market and to itself that it is in the hardware business to stay- not to experiment and bail out on first failure. While software allows for a try-and-fail-fast mentality, hardware requires focus, larger investments and a roadmap commitment. Google needs to take hardware seriously and only then can it expect its customers to do the same. All initial indications seem to point in the right direction.