Why Amazon’s Hardware Makes More Sense Than Google’s
It’s tough at the top.
This is especially the case if you think your direct competitor is either Amazon or Google. The two companies are locked in a constant struggle to one up the other. Technology is always evolving and to remain a leader in the industry, a business has to always be innovating and developing on new research.
It seems that in recent times, Amazon has pulled slightly ahead of their competitor Google in the hardware department. This is particularly the case when comparing how the hardware departments tie into the wider business operations. This article will go into a bit more detail about both Amazon and Google’s hardware divisions and explain why Amazon even having a hardware division makes more sense than Google having one.
Looking at the business operations of both Amazon and Google, they both have strategies that provide income revenue, and lots of it, that is completely separate from producing electronic devices. However, both companies still place a lot of time and resources into producing them. This brings up the questions of why and how does this fit into their businesses?
But first let’s explain:
What do we mean by hardware?
By hardware we mean a physical electronic item. It’s a broad term that can mean a lot of things, but mainly it's the actual electrical components that are needed for a computer to run. Referring to both Amazon and Google’s hardware divisions, we’re talking about the items they create such as the Google Pixel smartphone and the Amazon Kindle eReader, as examples.
How do the two companies compare?
The approach of the two companies seems to differ slightly. Amazon looks to create products where competition is not as strong, or where the margin is simple enough to get revenue from without an overly complicated strategy.
Secondly, and a key component to Amazon’s approach to hardware, is that it's designed with the purpose of introducing and keeping people in the Amazon ecosystem. If we look at some of the hardware the business has put out, like the first ever Kindle, and different iterations of the Echo, the products are often not completely refined. The optimisation of the products comes at a later date. By putting out the first product, Amazon tests the market. If the market seems receptive and there is opportunity for improved revenue, they will place more time into refining their offering.
The story behind Amazon’s approach here is that Amazon will put out a product and it’s not as much of a big deal. The purpose of Amazon’s products is clear. They create their hardware to serve other sectors of the business. For instance, Prime Video, Kindle, and Alexa.
Comparatively Google has a different approach to the hardware it creates. But side by side, it’s much more difficult to understand what the purpose of Google creating hardware is. In the past, platform experimentation was at the core of hardware creation. Now it looks as if the purpose is simply to be a diversified income stream for the company.
However, whereas Amazon’s products tie in with the wider ecosystem, Google’s plans are less all encompassing. To provide an example, the primary purpose of some of the hardware it puts out is to assist and ‘help’ the user. The hardware is primarily there as a platform for its AI. Comparatively, the Kindle is used by Amazon to showcase its online library. Amazon’s products exist in a symbiotic relationship with its wider income streams.
When people aren’t on the internet, visiting a website the majority of people’s experiences and interactions with Google come via a third party. For example, people use Google via the hardware of another company’s laptop, smartphone, or tablet.
When looking at the two businesses' approach, you wouldn’t be the only one to think that Google is simply dipping its toes in the market. The overall strategy is less comprehensive that Amazon’s and doesn’t tie in as extensively to the wider operations of the company. Whereas Amazon has a consistent approach to finding a gap in the market, bringing a product to sale, and refining that based on research. Google approaches its development more existentially, often as an experiment or test. Perhaps they are keeping the development arm alive in case it is rapidly needed and a gap in the market needs to be acted upon quickly.
SoftBank Vision Fund's head, Rajeev Misra, saw his total pay for the past business year more than double to 1.6 billion yen ($15 million), even as the fund's underperformance pushed SoftBank to a record $13 billion operating loss.