Google's hardware push

Google recently unveiled the second generation of its Pixel smartphone along with new voice-enabled home speakers, redoubling its commitment to the hardware business as it competes with a surge of devices from Apple and Amazon.com.

Google’s new products, including a Pixelbook laptop, wireless earbuds and a small GoPro-like camera, showcase Google-developed operating systems and services, notably the voice assistant. That means usage of those devices should stoke the company’s core ad sales business as buyers of the hardware use Google services like search and maps.

Speaking at the launch in San Francisco, Google hardware chief Rick Osterloh said the new products “perfectly demonstrate our strategy of re-imagining hardware from the inside out.” The Pixel 2 smartphone comes in two sizes, with comparable features, including aluminium bodies and no traditional jacks for headphones. Prices for the base model start at $649, while the high-end version starts at $849. The phones will be available Oct. 19.

The Pixel phones lack the brand lustre and market share of similarly priced smartphones such as the Apple iPhone or Samsung Electronics’s Galaxy S and Galaxy Note smartphones. Still, the original Pixel’s camera and software drew acclaim from reviewers, many of whom expect the line to become a robust competitor at the high end of the Android smartphone market.

Pixelbook, priced at $999, is the first laptop powered by Google Assistant and will support Snapchat, the company said. The keyboard folds behind the screen to turn the 12.3-inch touchscreen into a tablet. It will be available in stores soon.

Google Home Mini, one of the new speakers, is priced at $49 in the United States and would rival Amazon’s popular Echo Dot. It will be available October 19. The Home Max, with dual woofers for more powerful sound, is priced at $399 and with availability by the end of the year.

The Pixel Buds, which are priced at $149, arrive in November. Clips, which is pocket-sized camera with object detection and automatic recording capabilities, “soon” goes on sale for $249, Google said. Videos last only a few seconds and do not contain audio. The Pixel smartphone debuted a year ago, with analysts estimating sales of more than 2 million, pushing Google to record amounts of non-advertising revenue. Google’s “other” revenue category, which includes both hardware and sales of online storage services, accounted for about 12% of overall sales in its most recent quarter.

Last month, Google expanded its hardware development capabilities by picking up a 2,000-person smartphone engineering team at HTC (2498.TW) for $1.1 billion.

“It’s pretty clear Google is serious about hardware,” said Avi Greengart, research director at GlobalData. “Given that there is a Pixel 2, and given the financial investment, there must be a longer-term strategic intent.” Google moved into smartphones five years ago with the $12.5-billion purchase of Motorola Mobility. Protecting relationships with others in the Android ecosystem has become less of a concern. Samsung ratched down the rivalry with Google after the firms agreed to a major patent licensing deal in early 2014. Google’s eye is now on Apple, whose iPhone has become the smartphone to beat.