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Summary:

Google is making an Android-powered entertainment system and will design and sell it under its own brand, according to the Wall Street Journal. When I read the news, the word that came to mind: amazing!

amazing

Google is making an Android-powered entertainment system and will design and sell it under its own brand, according to the Wall Street Journal. This is somewhat like the hit Wi-Fi-enabled music system made by Sonos, a Santa Barbara, Calif.–company. When I read the news, the word that came to mind: amazing!

Amazing, because I just finished a post about Google’s me-too-ism affliction. Amazing, because as MG Siegler points out, the Mountain View, Calif.–based Internet giant will make hardware.

Amazing, because Google thinks that it will actually be able to crack the consumer electronics marketplace. Amazing to think that this company will build a supply chain and manage relationships with retailers and get people to buy it. (Or it can sell directly over the web, much like it did with its Nexus phones — pun intended.) Amazing, considering that the company’s track record on products beyond its core offerings — search, advertising and communication-oriented software — is spotty at best.

Amazing, to see one of smartest companies show such lack of discipline and self awareness. Amazing!

P.S.: By the way, this is the mystery Google device that Stacey Higginbotham reported last week.

  1. Google doesn’t seem to understand that hardware isn’t software and hackerism costs way to much (money, time etc) when applied to hardware. Google fails to properly design some of their own web properties, can’t think of actual Google hardware designed in California.

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    1. Well said!

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    2. Richard Bachner Monday, February 13, 2012

      Google has actually done a good job in designing their scalable hardware architecture and building cheap, easy to replace machines on their server farms, so they do have some knowledge of hardware, but I don’t think this is a core area of expertise for them for commercial applications and think it’s a mistake for them to devote massive resources to these types of projects. Google+ is unfortunately still way behind Facebook, and nothing other than a concerted effort by Google will even start to bridge this gap. Just go back and look at how many Super Bowl ads featured Facebook URLs, look at how many smaller businesses use the types of services found at http://www.facebookfansreviews.com that do nothing other than promote Facebook pages, look at where Facebook’s IPO is going to take them. To me, this seems like a much larger strategic concern for Google and what they should be devoting their resources to because Facebook is going to be in positions, whether this year or next, to use their social data to compete in search. When that happens, Google is at risk of completely losing their dominance in their one major business.

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  2. I’m with you on this Om.

    Just because everyone uses search doesn’t mean that Google understands the mass market nor the mind of a consumer.

    They don’t.

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    1. I’m not in or out here…but, good products, business, and all other user engagement starts with data and analytics… I think Google has this

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  3. Om you’re a smart guy. Whatever Google did to you to cause you to hate them with your very soul just get over it : )

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    1. Steve

      Hate is such a strong word. I am merely pointing out that somethings they are just not good at :-)

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      1. Meoyskie Porter Friday, February 10, 2012

        Wonder if you had the same snark and knee-jerk response when Microsoft went hard into the home entertainment hardware business.

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    2. Yea Om get over it. Be at least objective. You don’t know that the talent they are hiring right now might help them pull this off correctly. You are just assuming I guess.

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  4. Reblogged this on quickgamer88.

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  5. OM, Google is already in the hardware business …..$12.5 billions worth. lol.

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    1. Yes they are — and from the looks of it that is shrinking pretty nicely.

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    2. Exactly, lol now??? Many already suggested they would push into home entertainment when the motarola deal was announced.

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  6. Google has done hardware in the form of Google search appliances and custom servers for many years.

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    1. And again that is their sweet spot and a lot of its for their own internal consumption. I think consumer electronics brands and marketing are two entirely different things and Google just doesn’t have the chops for it.

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  7. I’ll give Google the benefit of the doubt here. Their focus here is probably much more big picture than just a simple music player. The big picture here is the complete digital convergence of peoples lives. Big companies will compete in this space, small companies won’t stand a chance. Apple will run away with defining this experience (and the profits) if other companies don’t step forward. I imagine only Googlrola, Microsoft, and Sony will have a chance to compete with Apple in this market.

    This music device in combination with Motorola set top business (and GoogleTV) could show promise, but Google will need to convince me they can execute in the hardware space.

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    1. I agree completely. I wouldn’t count Google out yet. I’m sure the product will be more than a glorified music player.

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      1. Yeah but how does it help them take on a whole different market place and channels where neither they or Motorola have any presence. Sure, they sell phones but even that is a declining business and not sure thing.

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      2. Motorola has no presence in the set-top box business?

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  8. Yes, their acquisition of Motorola Mobility, one of the world’s largest makers of set top boxes, will provide no help here.

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    1. Did you buy your set-top box from Best Buy or did you get it for free. Ask yourself that question and then try and see how they need to get into the channel. It has taken Sonos forever to be a decent presence and Google/Motorola has its work cut out.

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      1. True. And in general it is difficult for companies reliant on indirect channels to consumer to make that transition (Gateway, Microsoft, Palm et al). But prior to the Apple Store (both retail and online) Apple had no direct consumer experience and look how that turned out. In general, I have not been impressed with the tenacity of Google in sticking to decisions outside their core competence and certainly not in direct to consumer (e.g. Nexus One). But since a core of their strategy seems to be not conceding spaces to Apple and others that could significantly affect their core search and advertising businesses (mobile and now TV), this is not as far a stray from their core competencies as you imply. Android is good example of tenacity that paid off. Also, the essential failure of using consumer electronics companies to shill Google TV shows that they are focused on creating a viable solution to get their brand into an area that has enormous and potential on their core business. I am skeptical that they will succeed, as you are, but I think it is a reasonable attempt to find a solution and they could pull it off, given the right effort.

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      2. Derek – Android is something of a fluke. It was timing, the time when Verizon, Sprint & T-Mobile panicked over the success of the iPhone. The carriers made it the success it is as they had no choice. Google just happened to be in the right place at the right time.

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  9. Don’t forget this is the Internet company that’s working on self-driving cars..

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  10. I don’t understand why this comes off as such a big surprise. It was pretty obvious they want to go into hardware ever since we found out they want to buy Motorola.

    Did you really think they are buying Motorola with its 20,000 employees just for the patents? The Google stores opening up in Europe should’ve been another hint.

    Personally, I think this is great. Google hasn’t had a perfect start in the hardware business, but I think they are learning quickly, and have some good ideas with cutting edge hardware.

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    1. I think only the Google CEO can explain why they bought Motorola. It has to be patents – someone said those are worth about 2.25% of the sale price of every Android phone. As for Motorola’s sales: did you miss the recent quarterly numbers. Not pretty.

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      1. Josh Pritchard Friday, February 10, 2012

        Motorola headline price was 12.5B

        –MMI has 3.4B cash & equivalents
        –MMI offers Google $1B domestic tax assets, $700M annually through 2019 (see http://goo.gl/BC863 )
        –Patent Portfolio worth at least as much as Nortels
        –STB business consistently profitable on ~$4B rev with 60% of market, worth at least .5x revs?

        They’re getting to experiment with the hardware units pretty darn cheaply, and the potential upside is massive.

        The tax assets and cash are really key to understand, though, when you’re talking about the Motorola acquisition & price.

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      2. oh that 2.25% number, it’s becoming a Google constant.

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  11. you need to read this http://www.ft.com/intl/cms/s/2/d5fe2b1a-527e-11e1-ae2c-00144feabdc0.html

    It’s not about “can we do it?” “are we good at it?”, it’s about “should we do it?”. Can they afford to fail? yes they can. so why not? why the fear of failure? you only do things you think you’re good at?

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    1. I am not saying they shouldn’t try new things – I am saying they should try new things in arenas they are really good and have core competency. Read my previous Google post.

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      1. I read your previous post before this and left comment. I don’t believe in core competence. You core competence can become obsolete and limiting.

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      2. You are counting Google out of this because of their past experiences? There are a lot of smart people at Google and I think they know what they are doing, compared to your skewed analysis. Sorry. This article is way too biased against Google. As well as your other post.

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  12. I won’t believe it until Google announces it. It’s not so much that I don’t not believe Google wants to make hardware, but rather that the market for such a product is incredibly small. People just don’t care about networked music players. Most people can fit their entire music library on their phones or a USB drive, and it’s just easier to connect those devices to a player, than it is to set up a networked player.

    If Google wanted to make networked entertainment hardware, they should have started with Google TV, for they could have done a better job than Logitech. Probably any CE company could have done a better job than Logitech, the only company that might have done worse is Intel, because they would have insisted on using an x86. Oh wait, that’s what Logitech did.

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  13. If anyone can crack the electronics market it is Google… You think with all their knowledge about advertising that they don’t know what the consumers want? I don’t think there is another company that has as good of an impact and as good of a chance in competing with apple more….

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    1. Travis Henning Friday, February 10, 2012

      Yeah, because they’ve done such a great job with Google TV.

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  14. Google is an advertising agency filled with people who want to work for Apple.

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  15. Why is this so surprising ? I mean, they are buying Motorola Mobility. Once the deal is through and its one integrated company, Google will become a hardware manufacturer as well. MM has existing relationships with suppliers and retailers which can be expanded upon. This story is not THAT amazing.

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  16. I see no reason to be surprised here. Apple’s phenomenal success of selling tightly integrated ( with its own ) hardware and software is admirable if not outright envious. This move only seems to be aping Apple and many such companies ( Barnes & Noble , Amazon, MS to name a few )that are moving towards a consolidated h/w + s/w + content business.

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  17. I’m pretty sue it’s Siegler, not Seigler. ;-)

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  18. I’m pretty sure it’s Siegler, not Seigler. ;-)

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  19. I think we have known this for almost a year so it shouldn’t come as a surprise. Google has always been managed weirdly, and could be viewed as a gigantic laboratory with multiple teams working on their own. Sometimes, it pays of, often it doesn’t (I will always be sad that Wave didn’t survive due to lack of focus).

    On this particular project, I believe you should not be as sceptical. Google might not have a distribution network, which means it might be a bumpy road, but remember Amazon? Who would have thought the Kindle would be such a hit when it was first announced? Being French, I remember announcement regarding the fact that it was the most imported present 3 years ago, and most people hadn’t heard about it.

    I say let’s see where this leads us, and hope for the best.

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  20. cool

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  21. I hate to be that guy but realistically counting any company out based on past experience is a bit ridiculous to me. The reality of it is that if they can produce a home media system that bring simplicity and elegance to the living room… they’d be cracking a market that has been dying to be cracked for a while.

    Frankly, microsoft is slowly doing this with the Xbox but few people realize how amazing having an xbox connected to a living room T.V. is right now. If google were to make an easy to use piece of hardware that made playing songs, accessing media, and transferring between android phones… well they would be on to something. It would just require them to do something they rarely do, polish their product and get it to a *good*, usable form before rushing it to market.

    Whether that will happen is debatable, but to not hope they do seems a bit nuts to me. I still hold to the belief that the ipad is number 1 because it got there first and did it as close to correctly for the first time. If google does that… well they might just dominate a new market space rather than wither and die.

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  22. Om, I think everyone is missing the point. I think GOOG is trying to adopt the same strategy as Android phones wherein they build a benchmark device with a hardware partner (like Nexus One with HTC) to kickstart the interest and other manufacturers would soon follow suit.
    Just imagine a world of bluray players & audio systems from high end to low end manufacturers all running Android and possibly Google TV.

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  23. Mona M. Vernon Friday, February 10, 2012

    Gourville’s “Eager Sellers – Stony Buyers” should be mandatory reading: Will Google’s new hardware 10x better?

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  24. Google did it again

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  25. Did I miss it? Where’s the pun?

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  26. Amazon makes hardware too, why not Google?

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  27. I expect Gigaom’s analysis to lay down the good and the bad on a new technology, company or service. However, I don’t see any of that in this article, and frankly, it (the article) sounds more like a personal message than anything else.

    I am somehow puzzled on why you would publish such a low level analysis with almost no facts and a clear sarcastic and ridiculing tone.

    I expect more from you – don’t give me just Silicone Valley gossip and tech fashion trends, give me the facts and let’s see the product before we start pocking at it.

    Cheers.

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  28. An oft-repeated truth is that software guys never understand just how hard hardware is to execute, and hardware guys never grok the importance of good software.

    Doing the two together, doing it well, and dealing with all of the intricacies of sales channels, technical support, product life cycles and the like is one reason that there’s only one Apple.

    By contrast, so much of the Google culture is all about ship the idea on the Web in the fuzzy bucket of a project, call it beta for a long time, tweak, tweak, and then either set it to the wild, or kill it.

    In the consumer realm, you are either “all in” or you’re out.

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  29. Thanks for sharing your thoughts on this. I am fan of Google’s products, but wholeheartedly agree with sticking with what you do well. It seems the Google, and Microsoft for a while, just can’t resist flying toward that shiny blue light hanging from the porch rafter.

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  30. Why would Google have to be a hardware maker? I love my Sony built Google TV.

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  31. Mock all you like. I can’t wait, I’m buying it.

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