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Will Google’s New Hi-tech Devices Drive Profits?

Stock MarketsOct 11, 2017 05:47
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Investing.com - Last week Google (NASDAQ:GOOGL) unveiled a fresh lineup of new tech products, in an effort to strengthen its hardware offering. Among the new products are two Pixel phones, two Google Home assistants, a laptop-style device called a Pixelbook, and a Google Clips camera that operates using artificial intelligence.
The new devices represent a potentially significant revenue stream for Google, whose revenues until now have largely been from advertising. In the first half of the year, $44 out of $50 billion of Google’s revenue was ad-based. Google’s Hardware division might not just get lumped into the Other Revenue section of the financial statement, which stemmed from the Play Store, cloud offerings, and hardware, amounted to just 12% of total revenue, or 6 billion dollars.
At this point, it’s still too early to say whether any of the new hardware products will reach mass-market success, but that seems to be the goal. As Rick Osterloh, Google’s Senior Vice President of Hardware told The Verge in reference to the Pixel: “We don't want it to be a niche thing…We hope to be selling products in high volumes in five years.”
In the not-too-distant future, Google’s Hardware division might not just get lumped into the other revenue section of the financial statement, but will actually start generating substantial income on its own. However, with new iPhones and a plethora of competing smart home devices, it won't be easy for Google to break through on the hardware front.

Will Google’s New Hi-tech Devices Drive Profits?
 

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