Continuing the theme of the previous issue – an opinion on how the production of its own microchips can improve Google's position in the market.
One of the reasons for the success of the corporation from Cupertino is total control over both the software and hardware of its devices. As a result, devices perform better and faster than their more technically advanced Android competitors, using strictly defined resources to complete each task. Even if you look at the overall scale, the ecosystem Android is larger than that of Apple, but nevertheless Apple is constantly increasing its market share and in fact single-handedly 'rules the show' in the innovative development of the flagship smartphone segment.
In addition to the issue of uniformity and competition with Apple in the premium segment, Google is also working on a platform for a new generation of devices supporting augmented (AR) and virtual (VR) reality applications. I have had the opportunity to see several prototypes of AR applications and I can say that the potential for such products is huge. The only limitation is imagination. Be that as it may, especially in the case of AR, for correct operation it is necessary to collect and process a large amount of information as quickly as possible, and, as a result, it is necessary to work on the performance of system elements. And it is in the context of the future emphasis on AR and VR that Google's possible move to create its own microchip looks quite justified.
Uniformity = profit
Consider one of the good opportunities for Google to make money from ecosystem consolidation Android. Let's assume a scenario in which Google approves six processors for use by OEMs, depending on the class of the final device. The company will actually be able to cash in on the sale of these microchips and other parts of in-house developed hardware. I believe that it is worth not only controlling the software and allowing anyone to release a device with any set of hardware, but also taking full control of the hardware.
If Google does force Android device manufacturers to adhere to the specified hardware components, it will open the way for the company to new sources of income that can significantly increase profits. Also, Google has absolutely nothing to prevent the use of advanced microprocessors of its own design exclusively for the Nexus line. Due to the large coverage Android, there will be no shortage of possible partners for the production of microchips, this work, among other companies, will be able to be performed by Samsung, Intel, Qualcomm and MediaTek. A small competition for the best processor version will not hurt either.
Battle for premium
The popularity Android can be explained by the presence of the platform in the budget segment. In developed markets, it still has an advantage in the premium segment Apple.
On the ComScore report, we see that in the example of the US market Apple, not only has the largest market share, but also the only percentage gain over the previous period. A similar situation occurs in China and Europe.
Yes, Android dominates as an OS in smartphones around the world, but this is due to the fact that people cannot afford iPhone 6. As the standard of living rises, people are systematically switching to products from Apple. The only way for Google to reverse this situation is to create a truly competitive device. In turn, for this, it is necessary to endow it with a more advanced 'stuffing' in comparison with the devices available on the market so that the final gadget can consistently perform complex tasks. Part of the solution to this problem can be the systematization of design and “hardware” and overall control over the development of the latter.
Conclusion
The only step to close the gap with Apple, in my opinion, is to update the ecosystem and the devices themselves. The consistency of the system, achieved through the use of internally developed hardware, will help Google create powerful gadgets that can perform tasks at the level of top-end devices from Apple, while supporting advanced AR and VR technologies. Plus, developing your own microprocessors could have a positive impact on Google's bottom line.
Original material by George Caesarios
Elir: A bit of a muddled look, financials are interspersed with comparisons to Google's competitors, but the bottom line is correct: hardware innovation can dramatically improve Google's business, and in many ways. The example with augmented and virtuality looks somewhat doubtful; such technologies will be popular exclusively among geeks, despite the media noise. Yet performance is never superfluous, especially when Google-developed components are at the heart of it.