Google’s Big Strategy Shift

There’s so much to say about today’s Google hardware event, and it’s tempting to pour it all into this one post. Instead, though, I’m going to be focused here and probably write several separate posts on announcements from today during the rest of this week. It’ll also be the main topic of conversation on the Beyond Devices Podcast this week, so be sure to check that out later in the week.

My focus here is what I’m terming Google’s big strategy shift, but it may not be the shift you’re thinking of. Yes, it’s notable that Google is making its own hardware, but it’s been doing that for years. The big shift therefore isn’t so much that Google is making its own hardware, as that it’s preferring that hardware when it comes to Google services, notably the Google Assistant.

Previously, Google services have been launched on either the web or through the major app stores, typically Play and iOS simultaneously or one shortly after the other. But with the new devices announced today, Google appears to be using the Google Assistant as a way to advantage its own hardware rather than going broad. That’s a massive strategic shift, and has much broader implications than simply making a phone, a speaker, or a WiFi router.

Google is choosing to favor a few million hardware sales over usage of these services by billions of people

Think about what this means: Google is choosing to favor a few million hardware sales over usage of these services by billions of people, at least in the short term. Its old approach was to pursue the broadest possible distribution for its services by making them available in almost all the places people might expect to find them. But its new approach is much more reminiscent of Apple’s, which of course is designed to differentiate hardware and not drive maximum usage.

Why, then, would Google do this? The most obvious reason is that Google couldn’t find enough other ways to make its new devices stand out in the market, and so chose to use the Assistant as a differentiator. That’s understandable, but it’s a pretty significant strategic sacrifice to make. Another possible explanation is that it didn’t want to overload the Google Assistant with too many users at once, and so it’s put it in places where usage will be limited at first — Allo (currently 75 in the Play store and 691 in the App Store), Google Home, and the Pixel phones. That’s a bit odd given how broadly used all the services behind the Google Assistant already are — it’s not like Google can’t handle the server load — but it might make sense to work out some kinks before making the Assistant more broadly available.

The next question then becomes how soon the Google Assistant becomes available elsewhere — on the web, as part of Android, or as an iOS app. The sooner it becomes available, the more easily Google will achieve its usual goal of broad distribution, but the more quickly it erodes one of the big differentiators of Pixel. The longer it holds it back, the less relevant it becomes (and the harder it becomes to tell Google’s AI story), but the longer Pixel stands out in the market. I’d argue that how Google answers this question will be one of the strongest indicators we’ll have of how it really feels about its big increase in hardware investment.