Are More Google-Built Gadgets on Their Way?

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Source: Google

Amid speculation over whether Google will or won’t start building Nexus phones itself, Mark Bergen and Ina Fried report for Re/Code that Google is building a new hardware unit under former Motorola chief Rick Osterloh. Osterloh left Motorola last month, and has been hired by Google to unify the company’s different hardware projects. A Google representative confirmed that Osterloh has joined the company as its newest Senior Vice President, and will run the new hardware line.

Bergen and Fried report that Osterloh is taking over hardware development on Google’s Nexus phones and its OEM partnerships, and will work closely with Android SVP Hiroshi Lockheimer, who will work on software and platform development. The new hardware division that Osterloh will oversee, Chromecast, consumer hardware like Chromebook laptops and the new Pixel C device, the OnHub wireless home router, the ATAP experimental hardware lab, and Glass under the Project Aura team.

Osterloh worked his way up the ranks at Motorola during Google’s ownership of the company, and moved from the head of product management to president of the business. He remained as head of Motorola when Google sold the business to Lenovo, but left last month during a broad reorganization at the company. Re/Code notes that Osterloh’s leadership of Google’s hardware efforts could help “make life easier” for Google’s chip and hardware partners, who have been working with different parts of the company on different and sometimes competing projects.

In a separate piece, Bergen reports that Google has found it difficult, even impossible, to offer users consistent experiences across all of the products that bear the company’s name. That’s because Google’s many products “had operated as fiefdoms — initiatives from teams often working isolation and delivering inconsistent experiences.” A singular hardware unit would likely curb the problem, and make the user experience with Nexus phones, Chromecast devices, and Chromebook computers more unified. But Bergen notes that it’s unclear so far what changes in strategy Google is hoping to make.

It’s hard to determine whether more Google-built gadgets, like smartphones, are on their way. Bergen posits that Google probably doesn’t want to get too deeply entrenched in the smartphone business — something it already tried with Motorola, and has likely realized is “historically not a great business to be in — profits are thin, if they exist at all.” He thinks that Google likely has some bigger ambitions for Nexus, but Google hasn’t yet revealed how much the new hardware unit will change the Nexus strategy, which aspects of the phone experience Google will try to control, or whether it will try to steal more of the premium smartphone market from Apple or Samsung.

Another area where Google’s strategy is unclear is virtual reality. Bergen points out that one piece of hardware not under Osterloh’s leadership is Cardboard, the inexpensive virtual reality headset that works with an Android or Apple smartphone. As the company updates Android and its Nexus devices to include greater VR capabilities, it seems likely that the company will also create a standalone VR headset. But it’s unclear if such a device would come from Osterloh’s division, or from the team behind Cardboard.

Google should also be trying to compete with devices like the Amazon Echo, which serves to place a voice-powered search engine into millions of homes. While there are some Google devices with significant volume already — like the Chromecast or Chromebook — Bergen reports that Osterloh’s bring could indicate that Google is getting more serious about building viable business around those hardware projects. But it’s possible that viable hardware businesses aren’t really the primary goal. Instead, these hardware projects might just be “vehicles for Google’s real businesses: Enterprise software products for Chromebooks; and its streaming and over-the-top media services for Chromecast.”

Even if the revenue from Google’s hardware projects is secondary, Osterloh’s expertise in shipping hardware will be important in building the supply chain and distribution channels necessary for Google’s hardware projects. But Bergen notes that Osterloh will face external fights, like Amazon’s decision to remove the Chromecast from its online store, as well as internal politics, which have thwarted past efforts to unify Google’s hardware projects.

And at least some people at Google think that devices aren’t going to be around forever. As Google chief executive Sundar Pichai wrote in his first letter to shareholders, “Looking to the future, the next big step will be for the very concept of the ‘device’ to fade away. Over time, the computer itself—whatever its form factor—will be an intelligent assistant helping you through your day. We will move from mobile first to an AI first world.”

Pichai’s belief that devices will disappear from view hasn’t stopped Google from getting its hardware projects organized — which means that until artificial intelligence makes hardware irrelevant, Google still envisions smartphones, routers, computers and other hardware playing a role in delivering Google’s software and services to consumers.

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