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Does Google really love the Internet of Things?

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An article by Matt Hatton, CEO & Jeremy Green, Principal Analyst, Machina Research.

One of the recurring themes in IoT is the potential that the household names in the smartphone world, i.e. Apple, Google and Samsung, will come to dominate. They have scale, a culture of innovation and a whole load of technology to throw at the Internet of Things. All three have made some forays into the space. At CES in 2015 Samsung’s BK Yoon said that all Samsung devices would be connected by 2020. Furthermore it has launched a number of initiatives such as acquiring SmartThings and launching the Artik developer platform. Apple has developed its HomeKit and the iWatch, although it has been relatively quiet. Google has probably been the most active. It acquired Nest and has launched the Brillo OS for connected home, Eddystone, its open source Bluetooth Low Energy (BLE) beacon, and Android Auto for the connected car space.

In January 2014, at CES, Google launched its ‘Open Automotive Alliance’, the purpose of which has been variously described as making it easier to use Android mobile devices in conjunction with in-car units.

In other words, Android Auto is intended to support the paradigm sometimes called ‘content and application mirroring’, and to be means whereby drivers can use brought-in (via smartphones and connected tablets) rather than built-in connectivity while still benefitting from the head unit’s driving-focused UI. Many of the major automotive OEMs have joined the Open Automotive Alliance, including Alfa Romeo, Audi, Bentley, Chevrolet, Chrysler, Dodge, Fiat, Ford, Honda, Hyundai, Jeep, Kia, Mazda, Mitsubishi, Nissan, Seat, Skoda, Subaru, Suzuki, VW and Volvo. (Most of these are also participating in Apple’s CarPlay initiative

This is despite the fact that Google is reported to ‘building’ its own driverless car; are the carmakers turkeys helping in the preparations for an early Christmas?

Perhaps not. It is questionable the extent to which Google really loves the Internet of Things. In his 2014 book “Zero to One: Notes on Startups, or How to Build the Future” Peter Thiel sets out how Google needs to position itself not as an online search provider but as a broader technology provider. The benefit of doing so is to be seen not as a company that has secured a large market share in a narrow market segment (online search advertising) but as a company that has secured only a very small share of a much broader technology market. It participates in this broader technology space via activities such as Android, and some of the IoT initiatives above. Perhaps the point of all this is not necessarily to succeed, but to enable Google to plausibly claim that it is not a monopolist.

Google driverless carWill autonomous vehicles replace human-driven vehicles, even in the long term? Yes, Google is investing substantial amounts in its autonomous vehicle programme. If it is simply placing a long bet that autonomous vehicles will ultimately dominate, it is effectively a bet that it can’t lose since it wins even if the technology ends up being mothballed. It has effectively provided the test lab that government should otherwise have funded, endearing itself to government, and helping its positioning. And it will have learned a lot about the automotive market, about which it really does care and in which it really does want to succeed.

Google has not been afraid to make radical investments in projects as diverse as unusual as giant robot dogs. It has taken giant leaps into new areas, sometimes annihilating the business models of companies that did not previously think of it as a competitor, as it did with location based services. It has also seen its fair share of damp squibs: Google Plus has not even come close to challenging the mighty Facebook in social networking. Brillo and Android Home does not yet feel like one of those leaps, but rather a shallow paddle in an area in which Google is still feeling its way.

One potential stumbling block for Google in this area is the difficulties of IoT devices with its traditional business model. Smart home devices, and connected cars, will undoubtedly create and collect a lot of data about their owners and users. But Google still derives its revenues from gathering eyeballs and selling them to advertisers. Notwithstanding the success of the Google Play Store and its ventures into content, Google hasn’t yet really found another way to make money.

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