It’s finally clear: Google is getting into the hardware business. Last week, word came out that it was testing some sort of mysterious entertainment device in employees’ homes.
Today the Wall Street Journal reported that Google will build and market a Google-branded music gadget that will stream tunes around the home.
Google is about to finish buying Motorola, the world’s biggest maker of TV set top boxes and one of its larger cell phone makers, and Eric Schmidt has said that it wasn’t just for the patents.
It’s even building retail stores.
Maybe Larry Page really was jealous of Steve Jobs. Or maybe Google is just jealous of Apple’s revenue and profits and market cap.
Whatever the reason, this won’t end well.
Google has never shown that it has any of the characteristics necessary to build, market, and sell consumer goods.
Let’s take a look at all the things that made Apple one of the biggest and most admired companies in the world. Does Google have any of those things?
Design chops? Apple has revolutionised product design several times — the iMac, iPod, iPhone, Mac Air and iPad. Google’s best design was its original home page, loved for its white space and simplicity. Google+ had some nice elements — Circles was designed by Apple old-timer Andy Hertzfeld — but the recent redesigns of products like Gmail, Reader and Search have caused more anger than delight.
Shipping finished products that customers love? Apple products are designed with the customer experience top of mind — Steve Jobs famously said that Apple doesn’t listen to customers first, it figures out what they should want and then goes and builds that. Google is infamous for releasing half-finished products like Music and Google TV, slapping a beta label on them, then gradually improving them over time. That works fine with free internet services. It does not work with products that you’re trying to sell for hundreds of dollars. (Need evidence? Spend an hour with an Android tablet that hasn’t been updated to Ice Cream Sandwich.)
Customer service? The Genius Bar gives Apple customers on-demand customer service for any problem with any Apple product. Google hardly provides personalised customer service to its most important customers, the advertisers who make up more than 95 per cent of its business — most Google ad products are self serve for all but their largest and most important customers.
Manufacturing? Apple’s Tim Cook is a genius at managing Apple’s supply chain. Google has done some of this with suppliers for its data centres, but that’s different from setting up the parts and manufacturing necessary to build and ship tens of millions of devices on quick turnaround.
Advertising? Remember those iPod ads with the white figures dancing? Of course you do. Remember those Google+ ads with the muppets singing along to David Bowie? Probably, but not for the same reason.
Can companies change? Of course they can.
Microsoft spent 10 years and several billion dollars to get into the game business, and while it’s still about $US4 billion in the hole (lifetime), the Xbox is finally on a consistent profit streak and Microsoft has passed Sony.
But at least Microsoft had a long history of building and selling packaged consumer products like Windows, Office, CD-ROMs and even hardware like keyboards and mice.
Amazon is becoming a hardware company, but only after selling hardware through its online retail store for years. It understands logistics, advertising, marketing and customer service and has a huge store of data about customer buying habits which it can use to help.
Google has never successfully sold anything to consumers. Not a single thing.
Google is really good at building fast, useful, responsive software that runs at internet scale and at hooking up the users of that software with advertisers to make gobs of money.
That’s a great business. Google utterly dominates it. There are untapped adjacent markets, too — what about getting serious about apps, taking its expertise in delivering online services and really applying them to the enterprise? (Is Google really going to cede that market to Box.net? Really?)
Or building YouTube into the cable TV system for the Internet? Or even coming up with new forms of advertising for other kinds of media? But adding a business in which it has demonstrated none of the characteristics necessary to succeed just seems utterly mad.
Republished with permission from The Business Insider.