Alphabet Inc. (GOOG) subsidiary Google is well-known for its prowess in software. But it surprised observers by releasing three hardware products this year. The products, which are targeted towards established markets like smartphones and emerging markets such as virtual reality, integrate hardware and software. They serve different functions in Google’s evolving business strategy.
It would seem foolhardy for Google to venture into the smartphone industry when device sales have plateaued or are slowing down. But the Mountain View company’s delayed entry has come at just the right time. Products from its rivals, Apple Inc. (AAPL) and Samsung Electronics Co. Ltd. (SSNLF), have suffered from problems ranging from security issues to exploding batteries.
Google’s Pixel phones provide a secure and safe alternative, especially in emerging markets like India and China. The company has not released sales numbers yet but it might be safe to assume that they are not doing too badly. (See also: Reviews Are In For Google’s Pixel Phones.)
Pixel phones could also enable the company to rein in and control the Android ecosystem. This is especially important as the company prepares to enter new markets like China. Pixel phones also serve as showcases for Google Assistant, the company’s artificial intelligence (AI) solution that is now a part of most of its hardware products. Finally, the phones are also tightly integrated with the company’s other products and complete the Android ecosystem for consumers.
Facebook Inc. (FB) brought virtual reality into the spotlight with its two-billion-dollar purchase of Oculus Rift. But Google is credited with bringing it to the masses. It fabricated a cardboard version of VR viewing headsets that cost a fraction of Facebook’s Oculus Rift headsets last year. This year, it released Daydream VR, a headset that its vice president of VR says enables “a very high quality VR” experience. But it still comes at less than $100. (See also: What Is Google Daydream?)
Google is also making its VR headset available to a broader audience and has signed up partnerships with major media companies and the popular streaming service Netflix Inc. (NFLX) for content. At the same time, its purchase of an eye-tracking firm is an indicator of its business intentions. As VR makes its presence felt in mainstream media, consumers will likely prefer to sample (and, possibly, stay) with Google’s VR experience as opposed to investing in Facebook’s premium headsets. This could help the company garner a substantial market share in a market that is expected to explode.
Google Home is a competitor to Amazon.com Inc.’s (AMZN) Echo connected speakers. The market for a connected home is still nascent. But Google Home provides an opening for the Mountain View company to provide an array of services from booking flights to Google Shopping. The service could also help the company mop up valuable and interesting data about consumer habits that it could parlay into other businesses for services. (See also: How Does Google Home Compare With Amazon’s Alexa?)