Smart speakers and PDAs grew rapidly in 2018 and became sources of revenue for technology companies. Google has taken advantage of this growing tide better than other companies. Google’s starter devices are more dominant in global markets than Amazon’s dominant Alexa speakers, who had the advantage of being first.
Google has not only managed to gain significant market share, it has also earned dollars. The company generated more than $ 3.4 billion in revenue in 2018 with Google Home devices, with a profit margin of 25%. According to reports, Google has sold 52 million Google home devices worldwide.
According to Mark Mahaney, an RBC Insight analyst, Google’s hardware business is critically successful and is starting to gain ground in the marketplace. Alphabet, Google’s parent company, continues to increase its advertising revenue from hardware products.
Among Google’s recent hardware successes, the growing popularity of smart speakers has led to increased revenue and profits for the company. The other popular category generating massive revenue includes cloud computing activities and sales of the App Store. In the third quarter, the entire category generated 14% of Alphabet’s total revenues, while advertising generated 85.8% of the total.
This is the first year that Google launches a successful startup material. The last few years have been dazzled by huge flaws like Google Glass and Google+. The hardware category will now become a priority area for Google. The true value does not lie in the hardware that Google sells, but in the ecosystem associated with the platform.
A Morgan Stanley report suggests that Google should give its home appliances free of charge to defend its retail advertising strategy. The rise of Google Home has been dazzling. The company sold 2 million devices in 2016, 15 million in 2017 and 35 million in 2018. It is estimated that the product has 19.5 million users in the United States alone.
The rise in the category of smart home products is seen as an alternative to the smart phone market, which is very competitive. Google has a big advantage over its competitors in the category of smart home products. Companies like Microsoft have not been able to introduce a new product in the category of smart devices. Google has the advantage of having a synergy between the smartphone platform and the smart speakers.