I have been watching the developments in Google over the past few months with great interest. There may be a lot of back and forth on the merits of Pixel and other hardware products launched a few days ago, but in my opinion, Google is finally getting one key thing right in its quest to build better hardware — org structure.

Google needs to be able to assume more control over the hardware because:

a) Google services are increasingly beholden to various hardware channels for success (for ex: AI needs an interface for people to use it aka Alexa — Echo, Siri — iPhone, Viv — Samsung phones)

b) There are few Android phones which showcase the best of Google services. Most OEMs screw up core Android with their version of software and differentiated services that for most part make things worse. This makes things especially tough on the high end where it is hard to compete with the iPhone

So big picture, Google has three (somewhat competing) goals here:

1. Make great hardware that people want to buy to create channels for its SW

2. Ensure its OEM partners who build on Android succeed

3. Ensure the horizontal culture of building great software across all platforms is not distracted by the need to build vertically integrated hardware devices

After all, if the Google phone has earlier access to Android software then how will the Android OEM partners compete? And if Google starts building software that works better on its own phone, then that runs counter to ensuring you get best of Google across all channels.

So assuming it has to balance all these goals, Google would have to do the following things:

build a Hardware arm that can build great phones/hardware

Ensure they are treated just like any another partner by Android team (but can leverage rest of Google)

Ensure Google services are built equally well for all users across platforms

Buying Motorola and ensuring firewall between Moto and Android was an attempt at this. But the difference in culture (Motorolans != Googlers), confusion (was the separation between Moto and Android, or Moto and all Google?), and the enormous challenges that were pre-existing in the Android ecosystem made it very hard to operate.

The new setup is much better. The hardware team is fully inside Google (run by the same smart people who ran Moto btw), there is clear separation between Android and hardware team, and the hardware team is free to collaborate with any part of Google outside of Android to build the best phone possible. Google seems to have gotten closer to the ideal structure that allows it to build great services and great hardware. Now the proof of the pudding will in the eating… umm execution.

Finally, in my opinion, there is one potential negative of this outcome that is worth keeping an eye on. If software teams start building special stuff for Google hardware that doesn’t work (or work as well) for other devices, then it may make their products worse overall. After all, great software services companies focus on maximizing usage and coverage. If Google Assistant is only available on Pixel then doesn’t it forgo the benefit of data it could get from being on 100s of millions if Android devices? If iMessage worked across iOS and Android, then wouldn’t it be a fundamental more useful messaging product?

Net net, great iteration on organization by Google, good start on a thoughtful hardware strategy, but lets keep an eye out on the impact of the core software services end of things.

Now to go find myself a Pixel.

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