The Hills Are Greener: Why Google and Microsoft Are Getting Into Hardware

The Hills Are Greener: Why Google and Microsoft Are Getting Into Hardware

Jul 2, 2012

These are dark days for OEMs who manufacture hardware built on other providers’ OS, because their days may be numbered. Google and Microsoft, manufacturers of the biggest smartphone and desktop operating systems in the world, are moving into Apple’s realm of not just selling software, but the hardware it runs on too.

As Mark Panzarino, editor at The Next Web tweeted, it appears as if Microsoft and Google are realizing the combination that Apple has worked with for decades: hardware and software is the key to success. It allowed Apple to build itself up for years, and then once they had their mass-market hit in the field of iOS products, they became the biggest company in the world. Literally.

Microsoft fired their big shot into the arena of total vertical integration with the Surface. The buildup to this position from Google has been slow but pronounced. The Motorola Mobility acquisition was important for them, frankly, to start making money off of Android by selling the hardware as well. Though, Motorola is still independent, and may not show signs of its Google acquisition for a while. Wait until they make a Nexus device, even though the Xoom was basically the first Nexus tablet in that it was designed as a “Google Experience” device, and it’s among the initial wave of Jelly Bean devices.

Really, the clue to Google’s intentions is in the expansion of the Nexus brand. It’s becoming less of a way for Google to ensure that there’s at least one or two devices running stock Android out there. They’re going to use it to establish themselves, to prove their standing in the Android world, with the possibility that they can stand on their own eventually. Yes, they’re involving those that build branded Android devices in the manufacture of some of these Nexus devices, but it’s a Trojan horse. Each one is ultimately establishing Google’s place as a manufacturer of hardware as well as software.

This kind of vertical integration is very risky, because it takes many moving pieces to come together in the right way. It’s not just about making quality hardware and a core operating system, but about also having the software and media to help support it long-term. But Apple shows that it can be a jackpot. The iPhone has undeniably changed not just cell phones but computing as a whole. The iPad has defined a new type of computing, and it has Google and Microsoft trying to get even a small but significant part of the marketplace.

Right now, Google and Microsoft find themselves in a tricky situation: they have to make major shifts to their business models, selling hardware and media to go along with their standard software and services offerings. And they have to do this under the noses of the OEMs that have made their software and services what they are today.

Of course, the OEMs, by building on top of the backs of others’ work, may have put themselves in a perilous situation to begin with. After all, if the software creators stop supporting them, then where will they go? The next few years will be one of tremendous upheaval in the technology industry, and those who have the most control of their product will be the ones left standing.

Carter Dotson
Carter Dotson, editor of Android Rundown, has been covering Android since late 2010, and the mobile industry as a whole since 2009. Originally from Texas, he has recently moved to Chicago. He loves both iOS and Android for what they are - we can all get along!
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