Commentary

Google Playing Hardware Hardball With New Devices

The cyberturf wars –- which have seen hardware companies expanding into software and software companies now manufacturing hardware –- escalated to a new level yesterday as Google announced a gaggle of gadgets at its annual developer’s conference, Google I/O. The salvos include a seven-inch tablet, eyeglasses with videocams and an entertainment “orb” that streams and amplifies music and videos that will be made in the U.S. of A. 

“Google’s focus on hardware is a strategic shift for the company, which makes the vast majority of its revenue from advertising,” write Nicole Perlroth and Nick Bilton in the New York Times, adding that it will sell the Nexus 7 tablet and Nexus Q orb at cost or even a loss. It’s hoping that “revenue from purchases made on Google Play, its app and content store; additional traffic to its YouTube video site; and the advertising it reaps from all of its Internet products” will more than make up for the difference.

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The Nexus 7 carries the same price as Amazon’s Kindle Fire and is being made in partnership with Taiwan’s Asustek Computer, Bloomberg’s Brian Womack reports. It will run on an upgraded Android OS named Jelly Bean that has a voice search function similar to Apple’s Siri and also will be released in mid-July. 

"Nobody else has been able to deliver a truly amazing device at $199," Mike Rayfield, general manager of Nvidia's mobile business, tells John Letzing, Amir Efrati and Don Clark of the Wall Street Journal. "There is significant news in that.” 

Moor Insights & Strategy analyst Patrick Moorhead points out that most tablets that have come in under Apple's $499 starting price for the iPad “have been seen as less-desirable, low-performance products” -- an observation that Amazon did not respond to. 

The New York Timescalls the Nexus Q entertainment device “an experiment in American manufacturing” and “retro.” And while John Markoff  says that Google itself is mum about details such as exactly where its factory is located other than in Silicon Valley, Andy Rubin, who heads the company’s Android mobile business, tells him that the company “is not on a crusade.” 

“We’ve been absent [from the U.S.] for so long, we decided, ‘Why don’t we try it and see what happens?’ ”

Make no mistake that practical reasons are at play in what is being called “reshoring,” too. It’s a 16-hour plane ride to China for executives who still need to fix something F2F, and wages there aren’t as miserly as they used to be. Indeed, Markoff writes that “it is unlikely that the ‘Made in America’ lineage will be part of any marketing campaign.”

It does, however, set up a “obvious contrast” with Apple, writes Mike Isaac of AllThingsD.com, a hardware company that’s increasingly venturing into software with new products such as a product that will compete with Google Maps. Apple’s Chinese manufacturing partner, Foxconn, has been making headlines for substandard working conditions and a new report finds “serious violations of worker rights at Apple's other suppliers in China,” according to a piece by John Ribeiro of IDG News this morning.

The Nexus Q home-entertainment device will cost $299 –- considerably more than Apple TV’s $99, but it has bigger problems than that if the summary to “The Ed Bott Report” on ZDNet is any guide. “Google’s Nexus Q is expensive and odd-looking, and it doesn’t play well with devices outside of the Android world,” Bott writes. “It’s a pretty weak competitor to Microsoft’s Xbox 360, Apple TV, or even Sonos” before detailing what he see as design and pricing missteps.

Then there’s Google Glass, which “puts computer-processing power, a camera, microphone, wireless communications and a tiny screen into a pair of super-cool-looking, lightweight glasses,” reportsUSA Today’s Scott Martin. 

“For now, the 'smart' glasses can display images and video and have a button that can be used for taking pictures. But down the road, Google says, the glasses will access real time information 'including the ability to identify locations and provide additional information about your whereabouts.'"

The device was introduced by Google co-founder Sergey Brin with Steve Jobsian panache. 

“A team of skydivers logged into to a Google+ Hangout and jumped from a plane then sailed down to the roof of the Moscone Center where Google I/O is being held,” Mashable’s Sam Laird reports. “Via streaming video, viewers watched the descent from the jumpers’ point of view in real time. As stunt bikers pedaled across the roof then rappelled down the side of the building and entered the conference hall, we saw all that from their eyes, too.” 

Laird goes on to muse about the use of the glasses in sports. Imagine watching a football game through the eyes of the behemoths, for example.

Google is making a $1,500 prototype of the glasses -- the Google Glass Explorer Edition -- available to developers from the United States who attended the conference, Perlroth and Bilton report. The glasses are slated to ship early next year. 

One thing they cannot do -- yet -- is see the future, but it’s clearly going to get ever more competitive among the big players. 

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