On October 19 – With the launch of the Pixel 7, Google made clear its vision of making the various devices in its hardware family work better together. The latest article in tech media The Information says that in response to the Apple threat, Google is planning to cut back on software support and bet big on its hardware strategy, specifically “doubling down” on the Pixel phones and other hardware.
For years, Google’s efforts in the smartphone market have been partially successful. The Pixel 3 is still reportedly the company’s best-selling smartphone. But with the launch of the Pixel 6 series, Google has had its “fastest-selling” Pixel ever, making it one of the top five smartphone manufacturers in North America. While Google’s success to date has been minimal compared to Apple’s, it is clearly doubling down on the Pixel phones.
The Information found that Google is betting big on a hardware strategy that includes shifting product development and software engineering staff to Google-branded devices, rather than providing support features for non-Google hardware. Google, of course, provides the base software layer for almost every Android phone in the world, and new features are often available for devices of all brands. This move does not reduce support for partners such as Samsung, but the negative impact is still inevitable.
Leaked internal documents reveal that Google recently decided to remove support for certain Wear OS smartwatches and the smart assistant Google Assistant on Driving Mode, all apparently as part of an internal shift at the company. The leak claims that Google has a shortlist of Android brands “for which it should develop the best Google services”. The list includes at least partners such as Samsung.
Google’s strategic shift could also have an impact on “less important” Google devices. Last month, Google shelved plans for ChromeOS laptops, and with the launch of the Pixel Watch, it’s clear that Google is also moving away from Fitbit smartwatches.
The shift in Google’s mindset stems from three main factors: the first is Samsung’s poor performance in the market. Google fears that Samsung’s customers will drift to Apple and thus lose more market share. iPhone shipments surpassed Android phones for the first time in 2022 in the US. As a result, Google CEO Sundar Pichai believes it is “in the best interest of the company to protect itself” by investing more in its own devices.
The second factor is that US antitrust regulators are reviewing Google’s search agreement with Apple, which allows Google to offer Google search services on the iPhone. If the agreement is stopped, this could result in Google losing its dominant position in the iPhone Safari browser. The rise of Apple and the decline of Samsung could pose a significant challenge to Google’s revenue if the iPhone stops showing Google ads.
A third factor is a concern about the current economic situation. In a recent interview, Pichai said that Google’s goal was to “become 20 percent more efficient”, which has led to a hiring freeze in other areas of the company and a reduction in size. Last month, Google cut its incubator unit Area 120 by 50 percent and announced that its cloud gaming platform Google Stadia would shut down in early 2023.
Notably, Google is also apparently considering moving some of its staff away from the Android Automotive project, which is being used by carmakers such as Ford and Volvo for their in-car native operating systems. While the project is expected to generate more than $1 billion in annual revenue for Google over the next few years, the scale of revenue is still “too small” to have a meaningful impact on the company’s profits. In the second quarter of this year, Google’s revenue was close to US$70 billion. However, Google’s strategic shift will not affect the standard version of Android Automotive.
Kirk McMaster, former president of third-party Android OS developer Cyanogen, has said that as Apple continues to grow in the smartphone market, Google cannot and should not abandon the Pixel phones and its own hardware, as this would mean “literally ceding power to Apple “.
