Eric Schmidt confirms Google is interested in the hardware business, whatever that means

July 16, 2012
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Whenever Eric Schmidt speaks about Google’s short- and long-term plans at public events, it’s always worth paying attention to what he says about the company’s future – and sometimes he does say things that turn out to bite the company right in the behind.

The former Google CEO talked to journalists last Thursday at the Allen & Company technology conference in Sun Valley, Idaho, where he made it clear to everyone attending that Google is determined to make a play in the hardware business – like that wasn’t clear so far. Here’s what he told the press, according to the New York Times:

Not that he would call Google a “hardware company.” Mr. Schmidt used more encompassing language on Thursday, saying Google was “in the information business,” a label roomy enough to fit its giant search business, a new line of gadgets and everything in between. […]

Mr. Schmidt was tight-lipped about Google’s plans for Motorola but he promised that a new batch of products were nearly ready for prime time.

“We always wanted to be in the hardware business,” he said. “Larry and Sergey have always wanted to do hardware in one form or another. This was a way to get into it quickly.”

The company has released two new Nexus-branded products at last month’s Google I/O event, the Nexus 7 tablet and the Nexus Q entertainment device, both demoed by Schmidt during last week’s event. However, neither device is made by Motorola, and we’re still waiting for Google’s new mobile hardware subsidiary to come out with the first Google hardware products after the completion of the $12.5 billion purchase.

Google has stated time and time again that the fact it now owns Motorola, an Android smartphone and tablet maker, won’t affect its Android relationships with other device makers, but is that really so? While Schmidt was careful enough to remind people that Google is not a hardware company per se, it’s clear that Google want to have its own Android hardware out there. Google-made hardware will help the corporation make sure that customers who are faithful to the company’s online services have proper hardware to use them on instead of moving away towards rival companies, such as Apple, Microsoft and Amazon, which tend to offer buyers non-Google services and proprietary digital content stores.

And in the process of making its own hardware, Google may step on a few toes here and there, from the likes of Samsung, HTC, LG and other companies that are investing a lot of money, focus and energy on Android.

It will be interesting to see whether Google will make any serious money off of hardware, or whether the company will only create affordable products to protect its market share in the search and online ads businesses – which is how Google makes a lot, if not most, of its cash.

Devices like the Nexus 7 and the Nexus Q are not exactly hot money makers for the company. The first one is a cheap device, affordable for the masses that don’t want to pay $499 or more for a high-end tablet, while the latter is too expensive at $299 – and not really necessary.

At the same time is worth remembering that Schmidt made several statements in the past that could haunt him and Google. Like the time he said the Nexus One was a one-time deal, and then Google announced the Nexus S in late 2010, the second Nexus smartphone. Or when the Chairman said in late 2011 that Ice Cream Sandwich will be a huge factor when it comes to developers choosing Android over iOS as the first platform for their apps – but then ICS is only installed on over 10% of the available Android devices and iOS is still the more popular choice for developers. And what about his claims about Google TV, that it will make it to most people’s homes by this summer – something that hasn’t happened yet and has no chances of happening. Not to mention that Google was strangely quiet on the Google TV subject during I/O and, even more strangely, it came out with a more expensive alternative to all existing products that include Google TV support – yes, it’s the Nexus Q.

With all that in mind, we can’t wait to see what the first Google Motorola Android products will be like, and how much hardware the Search giant will produce – let’s not forget that Google may also be interested in making other kind of smart devices, like glasses or cars. Only then we’ll see whether Schmidt’s hardware-related statements had any hidden meanings or not. And we can’t but wonder how the Motorola vs everyone-else-in-the-Android-business unavoidable rivalry will affect the Android and mobile ecosystems.

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