17 March 2018
A Google executive speaks about the Pixel phone during a launch event in San Francisco on Oct. 4, 2017. With the second generation of its own devices, Google hopes to establish itself as a serious player in the consumer hardware market. Photo: Bloomberg
A Google executive speaks about the Pixel phone during a launch event in San Francisco on Oct. 4, 2017. With the second generation of its own devices, Google hopes to establish itself as a serious player in the consumer hardware market. Photo: Bloomberg

What can Google do to narrow the hardware gap with Apple?

It’s a fact that almost 80 percent of the smartphones in the world are currently on the Android operating platform which has been developed by Google. iPhone maker Apple, notwithstanding all the buzz surrounding its brand, commands only about 20 percent share for its iOS system. 

Despite the huge gap in market shares in the key segment, Apple is a more valuable company than Google’s corporate parent, Alphabet, in terms of market capitalization. Based on current share prices, Apple’s market value exceeds that of Alphabet by more than US$100 billion.  

Now, we come to this question: why is Google seen as a less valuable entity than Apple even though the Android system dominates the smartphone market?

The answer may not be simple, but we won’t be wrong if we conclude that a lot of it has to do with the hardware strategy of the two tech giants.

Apple has been focused on producing its own hardware from the beginning, developing a unique set of products in personal computers, digital music players, smartphones and tablet devices.

But in the case of Google, most of the Android devices are produced by partners, which include names such as Samsung, Sony and Huawei. The company did try to have its own-brand devices, launching Nexus products several years ago and more recently the Pixel gadgets. But the efforts lacked scale and ambition, making the firm a minor player in the business.

Overall, Google has failed to ride on the success of its Android platform and make significant inroads into the hardware field.

According to market research house IDC, Google sold 3.9 million Pixel phones last year, doubling the shipments from the previous year. That is, however, a blip compared to Apple’s global iPhone sales, which stood at 77.3 million units in just the three months ended December.

It is quite clear that hardware shipment is one of the reasons for the wide gap between Google and Apple.

Apple has been expanding its iPhone sales network in different markets by opening its own stores as well as selling through various distributing partners. But when it comes to Google’s Pixel devices, the products are available in less than ten markets in the world. The devices, for instance, were not available in China and India, as well as Hong Kong, since the product line was launched in 2016.

Google has been adopting an open platform strategy for its Android operating system since it was launched a decade ago. In the beginning, Google partnered with Taiwan smartphone maker HTC to produce the world’s first Android device, the Google Dream. Then, both parties developed Nexus One device in 2010.

Later, Google partnered with Samsung, LG and Huawei for the successors of Nexus products, until the company suspended the Nexus brand and replaced it with Pixel in 2016.

The Pixel devices won praise from gadget lovers and tech columnists on aspects such as camera quality and artificial intelligence capability. But from the perspective of ordinary consumers, the products were somewhat difficult or too professional for daily usage. That led to the sales getting limited.

Apple’s iPhone, on the other hand, is considered one of the best smartphones in the market in terms of ease of usage. People do not need to spend too much time to learn how to use the gadgets.

For Pixel or other flagship Android smartphones, a common problem is that navigation of the devices may involve more steps compared to iPhone. For example, iPhone users can press the home button to move back to the home screen in one go, but for Android or Pixel devices, users may need to press the back button several times to do so.

Google needs to improve the user-friendliness in order to lure more people into the Pixel camp.

Last year, Google announced the acquisition of the ODM department of HTC in a bid to boost its handset development team in Taiwan. It is a signal that the company wants to deepen efforts on own-brand products, rather than rely on its partners to promote Android.

Such efforts are crucial especially as Amazon and Apple are using their ecosystems to step into the next-generation artificial intelligence battlefield. To compete better with its rivals, Google must tighten its control on the Android ecosystem.

There has been talk recently that Google has hired some experts in chipset design from Apple and Qualcomm. The rumored move suggests that the company may follow the path taken by Apple and develop its own processor for Pixel devices, rather than using Qualcomm solutions.

If that happens, it will mark a key change in Google Pixel strategy. The tech giant could deploy the unique chipset exclusively for Pixel devices in order to differentiate them from other Android devices.

Given the current market realities, Google should be realizing that it needs to offer a unique Android smartphone experience with its own-brand devices if it wants to put up a real fight with Apple in hardware.

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EJ Insight writer

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