Understanding Google

2013-07-25 作者: Ben Thompson 原文 #Stratechery 的其它文章

Understanding Google

The surest route to befuddlement in the tech industry is comparing a vertical player, like Apple, with a horizontal one, like Google.

Vertical players typically monetize through hardware, only serve a subset of users, and any services they provide are exclusive to their devices. Horizontal players, on the other hand, monetize through subscriptions or ads, and seek to serve all users across all devices. 1

In Services, Not Devices , I argued that Microsoft’s focus on vertical devices was distracting them from the horizontal services world they are much more suited for. Or, as Narain Jashanmal put it:

Google certainly isn’t confused; they are 100% a horizontal player, 2 and fully absorbing the implications of that fact gives necessary color to yesterday’s announcements .

Google believes we are in a world of thin clients

Sundar Pichai and I are clearly on the same page when it comes to thin clients :

If you recall back to Google I/O, we talked about the fact that we are living in a pivotal moment in computing. Users are increasingly adopting computing devices. Smartphones have exploded in growth. Tablets are following the same trend. The combination of smartphones, tablets, laptops, televisions, it’s a multi-screen world for our users. And increasingly, there’s this whole new category of emerging devices on the horizon. It’s a very very exciting time.

We at Google are incredibly excited by this trend and are embracing it. Our goal is to deliver an experience that is seamless, consistent, and beautiful across all these screens. And the way we do that is by investing in two platforms. Android, and Chrome.

For a horizontal player, the focus in a “multi-screen world” needs to be on all verticals, not just one.

Chrome is the focus at Google; Android is an afterthought

For Google, it is Chrome that fits this focus on a multi-screen world. Chrome shouldn’t be thought of as a web browser; rather, it’s an optimized bi-directional delivery vehicle: the best experience with Google services for users, and maximum user data for Google. And it runs everywhere. 3 This is why Google has been investing millions of dollars in building the Chrome brand for some time now.

Android, on the other hand, enables several of those verticals, and keeps Apple honest in phones especially; however, by virtue of the hardware world it lives in, it’s not the best vehicle for reaching all users, and Google is fine with that.

Google isn’t that interested in phones anymore

The only notable thing about Android phones at yesterday’s announcement was their absence.

I’m not surprised. As I wrote after Google I/O, which didn’t focus on phones either, Android was defensive :

Google acquired Android in 2005 as a defense against Windows Mobile dominating smartphones just as Windows dominated PCs. When the iPhone arrived in 2007, Google quickly pivoted Android to defuse the new threat. And they were hugely successful…

For Google, Android was a detour from their focus on owning and dominating web services; it ensured that those services would be freely accessible in this new world of computing, including on the iPhones and iPads that were used liberally in nearly every keynote demo. And, now that Android is successful, Google is back to focusing on [services].

One could make the argument that Google can no longer control Android. I would contend they don’t even want to. In fact, that was the point. No one company will ever control mobile (or a great many other things that will run some variant of Android), but all mobile devices will access the web. 4

So, now that Android is good enough on phones, there simply isn’t any point in investing in it as heavily as before.

"Named" Android releases over time
“Named” Android releases over time

Google is worried about the iPad dominating tablets

The Android team is, however, still investing in tablets. The first half of yesterday’s event focused on the Nexus 7, the launch vehicle for Android 4.3 (still Jelly Bean). A few asides on the Nexus 7:

  • When horizontal companies build hardware, they almost always sell it at cost. After all, the whole point is usually to enable as many people as possible to access their services
  • I’m actually not certain the Nexus 7 means there will be a retina iPad mini. The new Nexus 7 costs $229; presuming it is sold at cost, that equates to $327 with a 30% margin – i.e., almost the exact cost of an iPad Mini. However, Apple has hinted that the iPad mini may have lower margins than 30% (meaning its cost-of-goods is higher than the Nexus 7), and a retina mini would almost certainly have higher quality components, particularly when it comes to the screen. $329 will be a tough price to hit this year (note too, that Google had to raise the price of the new Nexus 7 by $30 as it is) 5
  • Google is much more successful, relatively speaking, selling Nexus tablets than they are Nexus phones; they sell 10% of all Android tablets, but a tiny fraction of Android smartphones. I don’t think this is a surprise; the go-to-market in smartphones is much more complex due to the involvement of carriers. Google isn’t great at dealing with such complexities, and given the fact they’re a horizontal player, aren’t that motivated to get better. Tablet sales, however, are much more transactional.

That final point, however, works against Android in tablets. Device makers own the customer relationship and value proposition in tablets to a much greater extent than they do in smartphones, which magnifies Apple’s lead in these areas. Google certainly would love to see the tablet market look more like the smartphone one, but they’re just not that comparable.

Chromecast is an obvious product

Everything I’ve described makes the choices behind Chromecast clear:

  • Google believes that the future is multi-screen, and the most prominent screen in most consumers’ lives is the television
  • As a horizontal company, Google wants to be on every screen, and their vehicle to accomplish that across verticals, both from a technical and brand perspective, is Chrome
  • Chromecast works on all devices – including iOS – not just Android
  • Chromecast is priced as low as it can be
  • Chromecast has both a relatively easy go-to-market as a standalone device as well as allure for television makers

It helps that Chromecast looks to be very well-executed – everything Google TV wasn’t, in every way.


As I wrote in The Google We Always Wanted , Google is laser-focused right now. They have a clear identity as a horizontal services company, and from that perspective, just about everything they are doing makes sense.

  1. The economics behind vertical and horizontal business models are interesting; I plan to explore them in a future post [ ]
  2. Well, except for that bizarre Motorola thing. My best guess is that the decision was ultimately a combination of misguided kingdom-building by Andy Rubin, patent panic, and delusions of Steve-Jobs-esque grandeur from Larry Page. Give them credit for treating it as a sunk cost (and by sunk cost, I don’t mean abandoned; rather, they are treating Motorola pretty rationally, not trying to justify $12 billion) [ ]
  3. Sorry Windows Phone [ ]
  4. Many of those devices, especially in China, have non-Google services attached; since I believe Android was defensive, I also believe that Google is OK with that [ ]
  5. To be clear, the decision has already been made; any pundit that suggests this year’s iPad mini will be in any way influenced by the Nexus 7 is an idiot [ ]

文章版权归原作者所有。
二维码分享本站