Let’s take a look at a specific part from this excellent article published by AppleInsider back in April.
It wasn’t a fluke that the Moto X flopped. Google has only ever flopped in its hardware experiments. But make no mistake: Google desperately needs a hardware business, and it knows it needs a hardware business. That’s why it has spent incredible billions trying to buy its way into the hardware game, first with Motorola and then with Nest the moment it found a buyer to offload Motorola.
Why the need for a presence in hardware? First, Google’s partners have been terrible at implementing Google’s reference designs across the board. Additionally, Google just announced results for the March quarter that outlined that the profitability of its core ad business is collapsing, with 26 percent more clicks resulting in 9 percent less revenue.
Google needs to find ways to increase its ad business and a possible solution is to expand advertising beyond smartphones.
Steve Jobs pointed out four years ago that Apple had discovered that mobile users were different from desktop PC users in that they don’t start with Google’s search in the web browser when looking for entertainment, information or products to buy. They use mobile apps.
“On a mobile device,” Jobs noted, “Search is not ‘where it’s at.’ People aren’t searching on a mobile device like they do on the desktop. What’s happening is that they’re spending all their time in apps. When people want to find a place to go out to dinner, they’re not searching. They’re going into Yelp. They’re using apps to get to data on the Internet, rather than a generalized search. And this is where the opportunity to deliver advertising is.”
Google uses Google Now bring the power of its online services to mobile users in very practical situations. The question is, how is Google going to monetize? Ads?
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