Google Hardware– Horrible histories

Spare parts is not a fix. 

• Google will make spare parts for its Pixel phones available for DIY repair and while this will be generally well-received, it does nothing to address the problem that it is not very good at making hardware.
• Google has been trying to be more like Apple for years, and despite spending billions of dollars on its devices, it remains unable to compete with the cohort of Asian manufacturers who continue to be able to make better, cheaper and faster devices.
• The heart of the problem lies in the fact that Google is a software and data company that makes its living by understanding its users through their engagement with its services and selling targeting advertising on that basis.
• It is also used to the fact that when one updates software that runs on a server, it only has to be done once and all users of the service are instantly upgraded.
• Android devices have software embedded on them meaning that they all have to be updated individually which is far more complicated than it sounds as old versions hang around for much longer than one would expect.
• The Pixel 6 Pro’s slowness to issue updates for bugs is a good and current example of this issue.
• This requires a different mindset than the one that Google is typically used to employing and the result is a series of devices that have amazing and unique AI features compromised by hardware shortcomings that completely kill the desirability of its devices.
• The Google Pixel 6 Pro is yet another example where Google’s computational photography makes the photos that it takes outstanding but a series of bugs, a slow fingerprint sensor and slow updates have tarnished what would otherwise be great reviews.
• Its latest wheeze is to try and make up for these shortcomings by making spare parts available for DIY repairs which is something that Apple is notoriously bad at.
• Unfortunately, I suspect that this is going to do very little to improve Google’s market share in smartphones leaving me still wondering why Google makes phones at all.
• The features that it offers exclusively on its devices eventually make their way onto smartphones from Samsung, Oppo, Vivo, Xiaomi etc but this lead time has done very little to increase their appeal.
• If Google wants to improve its standing in smartphones, it has to make sure that its devices are top-notch which is going to require even more money to be shovelled into the bonfire of development.
• Google is not Apple, and it never will be because their relative approaches to the digital ecosystem are diametrically opposed to one another.
• Hence, if Google wants to be Apple it would have to stop offering the Google Ecosystem to other hardware makers and instead keep it for Google-only.
• This is virtually impossible to do and would also present huge risks to its advertising revenues and so I think that it will never happen.
• I have long argued that a better approach would be for Google to have an exclusive with one of the other device makers which would have its latest features for 6 months or so before rolling it out to the others.
• This would give Google its latest and greatest services on top-notch hardware and would enable it to increase margins by closing down its expensive hardware department.
• However, Google continues to demonstrate its affliction with engineering disease (see here) and I suspect that little short of a cataclysm is likely to cause things to change.
• Hence, investors will have to continue to live with the hardware millstone around their necks.
• This combined with a valuation that already looks pretty full leaves me unenthusiastic about taking a position in Alphabet shares,