Big Tech’s Hardware Paralysis
It’s been a very busy two months for consumer gadget enthusiasts. With Samsung kicking off the fall product cycle earlier than usual in July to Google’s product event in NYC last week, we now have a good view of how tech companies are positioned heading into the holiday season. As the gadget recession rages on while AI mania remains palpable, the way companies are thinking about hardware is splintering, leading to more questions and unknown.
In terms of the underlying themes found with product events (six to be exact – Amazon, Microsoft, Google, Samsung, Apple, and Meta), there is a growing recognition / acceptance that ecosystems will dictate long-term success. Wearables are finally getting the attention they deserve. At the same time, years of Apple ecosystem momentum is front-and-center with most companies. There is no more denying that Apple’s billion-user installed base is a force to be reckoned with. Thoughts of competing with Apple on price are firmly in the rear-view mirror.
Here were more granular takeaways from this year’s fall product event cycle:
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Google’s Hardware Bet Isn’t Working
One of the major tech themes from the past ten years has been the giants increasing their bets on hardware. The moves, clearly aimed at catching up to industry-leader Apple, have been met with very few pockets of success.
Some companies, like Amazon, were able to get customers to bite out of the gate even though longer-term engagement trends have disappointed. Other companies, like Meta, have discovered just how expensive hardware is to develop. Even hardware businesses such as Microsoft Surface, which were thought to be doing OK, have hit a brick wall in the consumer segment.
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The Pivot to Screens and Cameras
In the mid-2010s, the tech industry thought it was onto something. The maturing supply chain from the smartphone revolution had made it easier (and cheaper) than ever to produce small, stand-alone speakers that could be placed in the home. Instead of playing music or talk radio, these speakers would be transformational due to their delivery of digital voice assistants that was made possible by years of cloud and machine learning investments.
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