Why Google Struggles With Hardware

By | February 17, 2020

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 thoughts on “Why Google Struggles With Hardware

  1. abhilash r.k Post author

    Google is aiming for the future, not the present. It will bear fruit

  2. Moist Boner Post author

    Google Glass will take off any day now, and Google Stadia will take over the gaming market.


  3. bestamerica Post author

    how sadly is that…
    how come american company dont want to makeing their own any google devices

  4. Everton C Post author

    So… Am I the only one that noticed google bought Motorola with all its patents and sold it without the patents? Ofc it was sold for less, it was basically just a name.

  5. Kell DnB Post author

    Stadia is such a failure you really could put funny music to it

  6. Astonish Astral Post author


  7. brandon dixon Post author

    I feel so bad for stadia 😭😭😭 imagine getting ads in your game menu

  8. Need to Know Basis Post author

    I don’t trust anything Alphabet! Or Eric Schmidt moving everything over to Israel under a tech ion and IDF as well as Talpiot program with Russia and stealing USA s technology that the USA taxpayers paid for. Google does nothing for free. It needs massive amounts of data on individuals and then makes profiles of people and on their YouTube platform, they have changed the algorithms so that if you watch something dark, the next video it suggests is something light. Don’t trust. google or Alexa

  9. SoloNoco Noco Post author

    6:22 is this guy being sarcastic? I can't tell, honestly, my answer, none, probably my friend group just doesn't match the kind of people that would have Nest.

    Still it's crazy to see how solidified his opinion is on the matter purely due to his friend group. Dude thinks everyone in the world is running Nest 😂😂😂

  10. Fashizy Post author

    They struggle because they hire people like the old HTC team. For instance, they designed the largest phone bezels on Earth on previous HTC devices, rivaling even Apple at the time. And they still have no idea how to make thin, properly centered bezels. The old HTC hardware team is forever stuck 5 years behind the times, and Google loves them for it because HTC was so massively successful with that design language. 🙄

  11. James Vincent Post author

    Had a home mini for some time now. I'm well on the way to building a smart home. I'm happy to let Google learn more about me & it's easy to opt out of certain things in Account settings.
    I see Google as a software company over an advertising company. The ads it places in my web browsing are actually mostly useful. Though they do need to do better on mobile devices.

  12. Elbert Lee Post author

    Apple wants to go where Google is at and vice versa (sort of). Google wants Apple’s hardware brand and consumer recognition

  13. Yaya Boy Post author

    I always wonder why google phones from pixel 2 xl make we consumers buying expensive fugliness, they really emphisize “beauty comes from the insides”. IMO…..

  14. ucheucheuche Post author

    Google's still doing better than me and CNBC combined.

  15. Humorous Boris Post author

    Google literally fails at everything they do. They even ruin already great products they bought from people much smarter than them. Every day, there is a new problem and when they fix it, they somehow manage to make it worse than before. EVERY TIME! One has to sit back in awe at their complete ineptitude at doing anything right.

  16. stoeger 2 Post author

    So it seems like their software side, throw enough crap till something sticks

  17. Akash Vishwakarma Post author

    10:21 / 12:59 Google knows that you aren't single. 😅😅😅😅

  18. J C Post author

    the targeted ads are a grey area, with certain aspects of data collection being scary. but honestly, targeted ads save you a lot of time searching the internet and cross referencing websites. without them doing it online revenue would go down across the board.

  19. APDN Post author

    Google's hardware strategy to-date 👎
    I just don't believe they are serious about the hardware business.

  20. MisterNarrador Post author

    ha, google is sucking fingers from me, I'm not longer using their google browser, instead I installed a browser that does not let them track me or play their adds. so I'm not their product anymore.

  21. Maggie Jetson Post author

    As a firmware engineer let me tell you why Google sucks in hardware: the way they hire people. They hire people using the same generalist software interview by testing "scaling an algorithm to the order" method instead of how you build and integrate stuff with specialist domain knowledge. Apple does the opposite and only hire specialists focus on one area, the only area, from the vendor or competitor that are good at it, and keep them there only for that kind of work. Google will never have good hardware if they keep hiring generalists trying to do specialists jobs, they will only get people who spend all their time preparing for the Google style interview, and then sit in their generalists cubicle doing generalists work and then get stuck on specialists work.

  22. ATHLANTEAN Post author

    They could have dominated the market with phones like Nexus 5 and Moto G but stupidly moved out

  23. Dhyey Patel Post author

    Google is the best in camera but in hardware it's not good

  24. Ameer Hamza Post author

    i own pixel 2xl, they way these youtube show it have best camera etc i can say Samsung can do batter job, the only reason i have sale this pixel device because i am android dev so i need faster update that's it

  25. Deplorable American Post author

    Google has sold its soul to cheap Indian modern slaves for bigger profits.  I can tell you from my 10 years of experience with Indian IT workers that  they only brag about their skills and degrees but deliver nothing new. They are not innovative at all, and expert in copying/pasting.

  26. Wandile Tembe Post author

    Just don't understand why Google won't sell the pixel in South Africa…

  27. jtan163 Post author

    Google Glass might have made more of a break through in the market if they sold it. AFAIK only journalist, selected devs and selected celebs could get one. That kinda constrains success in "the market".
    Ironic that the company that controls the lion's share of the world's useful advertising can't sell their critcally acclaimed phone. Seriously, just weird..

  28. 21st Century MadMad Post author

    Answer: they try SO SO hard to be the Apple of android and it’s embarrassing!

  29. ganesh kumbhar Post author

    Alphabet/ Google
    Should see hardware as mean to increase it's software base business
    by Concentrate on volume than profit from hardware ie making them cheaper

  30. Victor Davalos Post author

    People doesn’t like to deal with resellers… if you live in US,Canada,UK,Australia and new Zeland you can buy google products very easily and in their oficial page, and the rest of the world? It’s very difficult , just some products like the nest or the google home are available but if I want a google pixel I’m out of luck, of buying from a reseller with increased cost, in the end google doesn’t make they products to accessible and easy to buy unless you live in a first world country

  31. Arif Koçer Post author

    Why? Because Google is only interested in being in our minds, not in our pockets.

  32. Hideika Post author

    I recently switched from my iPhone XS Max to a Pixel 3 XL and I love this phone so much. I trust Pixel phones as my main phones now, very reliable and dependable phones regardless of the specs. My next phone will definitely be a Pixel, I'm not a fan of Samsung or LG phones since they're known to be unreliable in my opinion.

  33. Jthomas Annillo Post author

    Chromebook sucks, not even because you can't do anything without internet connection but because no one (not even google) makes programs for it. Not everyone wants the google solution to certain applications. Not even the google play store has chrome versions of any apps that I could find.

  34. Linh Nguyen Post author

    I've got an interview coming up with Google's consumer hardware business, this surely is some interesting insight.

  35. Pedrito Sim Post author

    Galaxy nexus wasnt bad. But everything google tried to sell made by HTC and asus was absolute trash. Nvr again…

  36. TheEpicGameHub Post author

    To be honest, Google is really bad at everything except for their search engine, hence ad services. They just happen to be lucky enough to have come up with a half-decent search engine against just 1 actual competitor. Judge for yourself by simply comparing Amazon or Microsoft to Google. Both of those companies are leaders in multiple products and services and lead the way in many aspects. Google literally has no innovations of its own in recent times and just attempts to buy those who actually do innovate.

  37. Ana Caona Post author

    Google is walking down the wrong path. Instead of improving lives with useful tech, the tech is about selling advertisements to you.

  38. Collin Gordon Post author

    My school uses only apple products. iMacs, ipads and MacBooks

  39. Chastity Belt Post author

    Bill Gates was totally right when he said, that biggest MS fail was canceling it's mobile projects.
    I can't imagine how succsesfull could be Windows Phones in 2019/2020. They was really great in 2013/2014, with only one big problem – very small app market. But WP powered Nokia phones was insanely good devices for it's price. Some people even still use it today.
    I'm hope Microsoft will return to mobile business.

  40. Game Gods Official Post author

    Easy. Google's got too many fingers in too many pies.

  41. Sean Post author

    Why google struggles in general. Google its time to shut down. Such a garbage company. Yahoo is better and older

  42. IAN THESEIRA Post author


  43. Kewl Khid Post author

    Google is truly disappointing when it comes to hardware.

    The Pixel 4XL is all you need to think about.

  44. The Non Smoker Post author

    0:28 can I get the link of that Pikachu live wallpaper?
    Play store Link?

  45. The Non Smoker Post author

    Google can play mobile industry like Redmi and Realme by showing in UI ads and phone itself in a cheap price butt no Google wants to play like apple 😷

  46. ROCKY ROCKZ Post author

    first and foremost reason is pricing . pricing should be reasonable . Apple is well established long ago so people are habituated with Apple also with its pricing . but in case of google it's a wrong step entering the market with high end devices . people don't give a try with a new product . price should be reasonable when you are new in the market

  47. The Unknown Post author

    i think its due to usa fcc regulations same goes with batteries it needs to pass fcc regulations and it goes with any brand even apple

  48. Brandon Wallace Post author

    I remember the Moto Droid. I had one. That phone was amazing. I did hate the physical keyboard though. And chose to use my blackberry much more because of it.

  49. Danny Ooi Post author

    You know you are doing not bad, when your struggling business division is doing $6B in revenue. As a comparison Bose as a company did $4B in 2019.

  50. zlerner716 Post author

    I don't care how long ago this video came out it is b***** that early Chromebooks do not have a lot of storage. The original Samsung Chromebooks at 240 GB hard drive because they do not know how the computer would be used and utilized they also had CD drives and more RAM. There was not a market for super low-powered processors for the PC space

  51. vincent pham Post author

    You know why, they are not open source friendly. Learn git and azure

  52. Tennis Sir Post author

    Just like Microsoft failed at smart phones and tablets – it’s hard to break into a mature market.

  53. Focus Media Post author

    Imagine having billions to spend on experiments (acquisition of Motorola, Google Glass,) Google knew it was for experimental purposes and the failure was the likely result. But it was all drafted in the budget meetings!

  54. Otha Bojangles Post author

    I love how all these companies unknowingly turned all their users into commodities and they make billions off of us. We make them rich and none of us see a damn penny from it. Imagine if everytime Google uses your info to make a profit they had to pay us 1 dollar. The best part is people don't even know they are nothing more then a commodity too these companies.

  55. Keyur Parikh Post author

    Google hasn't learned from Samsung. HTC used to be innovative in the phone sector, but they lost their vision, Google bought out the mobile division but never heard the people of what they want. Samsung had done that and that shows in sales.

  56. Devajit Borah Post author

    Google is like a art student who is trying to study science subjects .

  57. David Bozic Post author

    They haven't been able to top the Nexus6 and they know it. It was the best Nexus phone they ever made. I have two of them.🐈

  58. Martin Day Post author

    Google is primarily an advertising company that does a bit of search.

  59. Joey Gonzalez Post author

    OH yeah google educational tools for free are a huge win with people today.

  60. WaevPlays Post author

    After 13 minutes
    Me: so why is google struggling with hardware?

  61. Por Que Post author

    One of top companies to work at in the world ans hard to get into yet struggling to produce quality hardwares. What do the engineers do? Coding and auto cad? Lol. Companies in china are laughing while watching this video. Stay in your lane google as advertising company.

  62. John Tungul Post author

    The Nexus series is very good they abandoned that division. It is fun because different manufacturers get to create Google's flagship each year not just one company so you've got a design variation sort of like a flavor if you will. My mates used to love them all nexus devices

  63. W W Post author

    Google, please create a pixel 5 that is sleek and stylish, has an incredible battery life, is easy to use, and innovative. Don’t be like Apple and ignore what people actually want 🙏🏼

  64. Mihail Vovk Post author

    Google with hardware probably would become very dead soon. I was google fun for many years. I had nexus 5/6, pixel, pixel 2 and pixel 4 (had, not mine anymore). Cpl month ago I bought airpods pro, year ago second ipad air. And then I bought suunto 7 watches with android wear. Those Suunto watches were so disappointing experience and because of them I decided to switch fully to the apple environment (I wanted Apple watch and only reason to have them was to say bye to Android). Yes, Google, you have a pretty good phone. But once I've got iPhone pro – I'm not charging it anymore. For my usage, it's enough 20-40 minutes plugged in my car while I'm driving. My iPhone almost not losing any charge during a night. And Android always lost about 20-30% per night. Google , you should change something very soon. Your nest family is outdating freaky fast as well. Google. you are not innovating anymore.


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