Google eyes the risks of going upmarket

Google eyes the risks of going upmarket

5 March 2013 by Paul Dempsey

It's been a busy few weeks for Google. First, its Glass heads-up display product moved into the developer/early adopter phase. Then, with more immediate ambitions in the Air/Ultrabook market, the search giant unveiled its Chromebook Pixel entry.

I haven't tried Glass but did get the chance to play with a Pixel for an hour or so, while visiting a friend on the West Coast who'd got his hands on a review model.

And what has struck me about both is that they don't feel like 'traditional' Google products. Without wanting to be rude, they feel a bit upmarket.

Let's take Pixel first. It's the one more of you will get your own chance to test drive. The aluminium casing echoes the MacBook Air but with its own sense of style. This is a very good looking machine. Then there's the high definition 2,560x1,700px touchscreen - the tablet meets the retina display. It looks splendid. And there's a chunky Intel Core i5 microprocessor running the show.

So far, so good. Add that Pixel's light and you can see a potential attraction to road warriors - until, that is, you remember this is a Chromebook. The means the browser is the OS, so not only do you essentially have to use Google's versions of popular productivity software but you also need a decent web connection to do so.

It's perhaps worth noting here that this week has seen the US Telecommunications Industry Association disclose that, for the first time, 2012 saw north American mobile subscribers spend more on data traffic than they did on voice. The trend to mobility is confirmed but remember that most of those subs continue to complain about the huge variability in network quality.

Then, there's Pixel's price: £1,050. That's essentially parity with the Mac OS or Windows-based alternatives that will let you work with your desktop software offline.

As beautiful a machine as it is, Pixel's problems are obvious. Beyond Googlephiles (or Googleheads or Googlies?), it's hard to see the product finding a mass market. And remember, existing base Chromebooks retail in the £200-£300 range.

Meanwhile, Google is also charging about £1,500 to pathfinder users of its Glass product. That number will fall, as these smart specs move towards a full launch. But I don't suspect it will go that far.

Like Pixel, Glass feels like an upmarket product. Indeed, if Google can tweak it with a few of the industrial design smarts it has brought to its new 'touchtop', the company could also have a very stylish one.

But both innovations raise an interesting question. The Google Labs operation - and the company's willingness to let staff spend 20% of their time working up their own ideas - is delivering some cool stuff. But there are two sides to this.

Software and apps can largely be built into Google's existing infrastructure. They surround a primary service - that built around the search engine - that is arguably the best value on the web. The best search, free (or reasonably priced) apps, free email and so on.

The Chromebooks and Glass (and other products we can expect as the company integrates its purchase of Motorola Mobility) can leverage this infrastructure, but they exist in a world of hardware economics. Even here, Android-based handsets are increasingly seen as 'value' alternatives to the iPhone.

In short, Google has to marry its innovation to hard price tags rather than its ability to sell advertising. You can assume some subsidies given Google's wish to keep your online spending mostly in its gently-fenced garden. But the numbers will only shift so far. Amazon still matches the cost of its Kindles to the cost of the components (though not the software and marketing), even if they are essentially shop windows.

So far, Google's ability to match its offerings to the sense that they are premium is unproven. Indeed, for a company that has built itself into the most powerful web name by essentially 'giving it away', the shift it needs to make in one part of its marketing will be challenging. Right now, it appears that the company is still feeling its way.

Edited: 05 March 2013 at 12:03 PM by Paul Dempsey

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    Posted By: Paul Dempsey @ 05 March 2013 11:52 AM     General  

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