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Why Google's Foray Into Hardware Could Be a Total Disaster

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Illustration for article titled Why Googles Foray Into Hardware Could Be a Total Disaster

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.

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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.

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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.

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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 revolutionized 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.

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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 personalized customer service to its most important customers, the advertisers who make up more than 95% of its business — most Google ad products are self serve for all but their largest and most important customers.

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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 centers, 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.

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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 $4 billion in the hole (lifetime), the Xbox is finally on a consistent profit streak and Microsoft has passed Sony.

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But at least Microsoft had a long history of building and selling packaged consumer products like Windows, Office, and 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.

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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.

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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.

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Republished with permission from The Business Insider

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DISCUSSION

So this whole article is written to prove that Google would suck in hardware business because they have no experience building it, selling it and supporting it? At the same time, you mention in the forth paragraph that they didn't buy Motorola for patents only? You know, the same Motorola that builds cell phones, tables and TV set top boxes, and has plenty of experience doing it, has factories, workers, supply chains etc?

What Google needs is to copy what Apple is doing and expand it some more - instead of 50 cell phones, make one or two models that you can sell to every carrier, with a recognizable design and name, make accessories that would work for more that one model and one generation. Make 2 tablets, in a 7" and 10", and make sure that your OS is consistent between all of them - sort of Nexus line that is not influenced by carriers decisions, but by Google only . Make a better Google TV box. Beat apple at their own game, because you are Google, you have the power to innovate and make things better. That Google Cloud service - integrate it for free in all Android devices, give users 20-50GB for free, make Google Music so your music is never lost even if you fry your home computer. Make something to manage moving all that music to your devices that does not suck as much as Itunes. Keep offering Android for free to Samsung and HTC and others, but make sure that your Motorola made devices have vanilla android and are Nexus-like in quality and support, and when people realize how nice it is to have timely updates to their OS, they might force Samsung and HTC to quit making custom skins.

I feel that Google is really close to all this - basically everything I mentioned is sort of already here, but not in a nice, cohesive manner that looks like it was designed with the same idea.