Google aims to be able to offer hardware on a large scale within two to three years, including Pixel and Nest products. Revenue from Nest products is increasing, but sales are still pretty loss-making.
According to Pichai, long-term hardware planning is required:” The longer you can do this, the more benefits you have. ” He refers as an example to silicon and probably refers to the advantages of optimizing software on chips. According to the CEO, it is necessary to scale up in the US and internationally to ‘take the adoption’. This would take two to three years.
Google is active with hardware such as the Pixel 2 smartphones, Google Wifi, Chromecast and Nest products. In its quarterly results, the company adds the revenue from this under ‘Other revenues’. Sales in this division increased to $ 4.35 billion in the quarter, compared to $ 1 billion last year. It is difficult to determine which part of that hardware turnover comes from, as the revenues from the Play Store are also covered.
It is clear that Nest is responsible for sales of $ 278 million . Sales for the year 2017 totaled $ 726 million, but there was an operational loss of $ 621 million. This is apparent from a calculation of Recode which is possible because Alphabet no longer classifies the Nest figures under its ‘Other bets’ report, but under the ‘Other revenue’ figures of its subsidiary Google. Because of this change, the company publishes 2017 figures with and without Nest as part of ‘Other bets’.
Alphabets total turnover amounted to 31 billion dollars in the fourth quarter of 2017, with which ‘Other revenue’ with his 4.35 billion is still a modest part. The Alphabet profits amounted to 9 billion dollars. Nest was acquired in 2014 for 3 billion dollars. Last year, Google took over part of HTC’s mobile division for $ 1.1 billion.