Google wants to build a vertical business. The search company wants to be more Apple-like and own a complete technology stack where it can use own brand gadgets to leverage its software and services.
Going vertical is a smart strategy – look what it did for Apple. At first sight Google looks better placed than Microsoft to build a full technology stack to tackle Apple head-on.
Google has a credible position in smartphones. Phones using its Android operating system outsell Apple’s iPhone by a considerable margin. Android is well behind Apple in tablets, but catching up. The company’s business model and multiple partners mean its market share could go past Apple later this year.
True, Google is nowhere in the PC sector. In sales terms the Chromebook is a freak show – a mere rounding error in industry statistics. It is hard to see that improving in the immediate future.
Google’s Trojan Horse in the PC market is the Chrome browser. ChromeOS may be just a blip on the radar when counting operating systems. If we count screen instead – which are arguably just as important these days – then Google has a significant PC market share.
Likewise Gmail looms large in the mail sector and when it comes to search no-one comes close. Factor these into Google’s vertical market strategy and we’re looking at something potentially powerful.
Still nowhere in hardware
Google’s problem is that it doesn’t register in hardware. The company depends almost entirely on Samsung for its share of tablets and smartphones. Google may own Motorola and by all accounts the latest phones are great: they just don’t figure in market share statistics.
Despite an impressive technology stack, Google remains dependent on its partners. If the bigger names defect to Windows or another OS, the company’s bigger ambitions could be dashed. Google has rivers of gold coming from search and advertising revenue, but the company seems unable to parlay this money into hardware and therefore build a complete vertical stack.