Recession and regulation sees Google turn to hardware
For a long time, Google has been in a position that helps it dominate the mobile phone market. Hardware partners like Samsung provide the devices themselves (with the Samsung Galaxy S22 Ultra currently one of the best smartphones to be had), which all need to be equipped with Google software as per licensing agreements. Even Apple phones ship with Google set as the default search engine on Safari. But these things could change with antitrust regulators looking to break up the lucrative Apple-Google deal and Samsung simultaneously losing ground in the US market. A report suggests that Google is looking to strengthen its hardware division even further at the expense of Assistant improvements.
According to details obtained by The Information, Google is restructuring its teams internally to focus more on its own hardware efforts. Google leaders identified the company’s hardware division as one of the most important pillars going forward, as it allows Google to have full control over the software run on the devices. This is particularly important, with Samsung on the decline in the US and with Apple for the first time having a market share of over 50% in the country this year.
At the same time, Google is pulling away resources from projects that it doesn’t deem profitable enough. The company has already largely shuttered its in-house incubator Area 120, killing half of the division’s projects. That doesn’t appear to be all, though. The company is also diverting employees from Assistant projects focused on devices not made by Google, like TVs, cars, headphones, and wearables. The company wants to focus on its core hardware partners instead, with Samsung, Xiaomi, and OnePlus cited as Google’s premium partners.
Google doesn’t want to rely solely on Samsung for Android’s success in the US
So far, it doesn’t look like any of the side projects are on the verge of getting killed off completely, but since Google doesn’t seem to be able to find a way to monetize its voice Assistant, it makes sense that the company wants to focus on developing the system mostly for products that do make money.
At the moment, Apple’s market domination isn’t a problem for Google, per se, as the companies have a lucrative deal that makes Google Search the standard search engine on Safari. However, with regulatory scrutiny looming and rumors of Apple launching its own search service abound, Google doesn’t seem to count on this partnership anymore.
The Information also spills the beans that Google is working on a tablet that’s “still under wraps.” As the company has already made the Pixel Tablet official during Google I/O and then talked more about it during the Google Pixel 7 Pro and 7 launch, we presume that this isn’t the tablet the publication is talking about. With the Pixel Tablet slated to launch in the first half of 2023, there might in fact be enough room for another Google tablet to come out that same year.
What doesn’t seem to fit this new hardware-focused strategy is the fact that Google just recently killed of its own Chromebook hardware division, which was slated to release a Google-made Pixelbook in the near future. It’s possible that Google could bring this division back now that it’s refocusing its strategy, though it’s unlikely that the company will walk back on its decision so quickly.
Another project to be cut recently is Stadia, Google’s cloud gaming streaming service that was released with to fanfare only in 2019. The company will refund all purchases made on Stadia, including hardware like the controllers, which will likely hurt its bottom line even more in the short term.
