This time last year, we were asking if Google is now a hardware company. Now we have our answer: Yes - or, at least, it's taking hardware a lot more seriously, even as the money continues to come from ads and search.
"We want to create this into a credible business so that we can invest a lot in it," Google SVP of Hardware Rick Osterloh said on the latest episode of Too Embarrassed to Ask. "If you're doing only for referential purposes, then it's hard to make the really big, long-term investments that are required."
Osterloh acknowledged that while Apple is "an amazingly strong company" in hardware, Google is coming at things from a different angle. The slew of gadgets announced earlier this month at its fall product event - including new Pixel smartphones, an AI-powered camera called Google Clips and new smart home speakers - are all built around the Google Assistant, which the company believes is more useful than Apple's Siri.
"We felt like building products around that was going to be an interesting set of new experiences," Osterloh said. "We really put a filter on: 'Does this product bring something new to an AI or machine-learning experience?' If it does, then we wanted to proceed forward with it."
"Why would I use Google Assistant?" he added. "The most important thing these things do is answer questions for people, and that plays right to our historical strength, frankly. We're very good at being in the answer business."
On the new podcast, Osterloh also talked about how Google's smart home speakers, including the new Google Home Mini and Google Home Max, fit inside its business. The Assistant that answers your questions doesn't advertise to you the way a page of Google search results would; however, what you ask it does tell the company what you're interested in.
"It's definitely accurate that searches will result in ads, but the Assistant is not an ad-driven product," he said. "Without a doubt, our primary business model is ads and search in combination. But Assistant doesn't use the ads-driven business model. It doesn't, at the moment, have a business model."
He also talked about why Google joined Apple in doing away with the 3.5 millimeter headphone jack in its high-end smartphones.
"Phones are headed down the direction of no bezels," Osterloh said. "Everyone knows it, it's super-obvious. Eventually, that 3.5mm will be gone from everyone's phone. So, we wanted to drive it, both for our products and for the android platform, to try and standardize that interface."
"At the end, we think this is the right long-term direction," he added. "We wanted to make this change when we were smaller. If we had a huge install base, this kind of change would be much more painful to do, so we did it now."