easy to imagine a future in which products as mundane as
toasters and window blinds will be connected to the
internet and controlled by software.
harder to guess whoís going to make them.
producers of consumer software such as Google, Facebook,
Amazon.com and Snapchat are branching into designing
physical goods at accelerating rates. Driven by
intensifying competition for consumer attention and
enabled by declining manufacturing costs, software
companies are entering battle with firms as far-removed
from Silicon Valley as Timex and Ray-Ban.
years to come could see Amazon making bookshelves that
know whatís on them, grocery delivery app Instacart
peddling refrigerators that restock on their own and
music-streaming service Spotify designing headphones
with a cellular chip and flip-down video display.
all conjecture for now, but they are real considerations
for software behemoths that want to solidify monopolies
as well as startups seeking to upend traditional
consumer brands, technology executives and advisors say.
thatís a physical object is eventually going to be a
combination of hardware and services," said Amar
Hanspal, senior vice president for products at design
software giant Autodesk. "The more industrial and
complex ones are going to come from a traditional
hardware company. But the more consumer-oriented and
less complex, software companies will enter those
product categories a lot more."
latest signs of that future emerged Tuesday, when Google
launched Home, a $130 tabletop device comparable to an
alarm clock, except it responds aloud to spoken commands
and search queries. It also revealed a Wi-Fi router and
the first fully Google-branded smartphones. The
unveiling caps a turnabout for a company that originally
limited its mobile ambitions to supplying free software
to handset makers.
announcement came the week after Snap Inc., formerly
Snapchat, shared details about $130 video-camera
sunglasses itís shipping later this year.
convergence of hardware and software follows decades of
stark separation (Bell Labs and Apple Inc. being among
the few notable exceptions that pursued both). Product
makers Sony and Samsung struggled to get into developing
software, with bugs and poor architecture drawing
negative reviews. Software vendors, used to fat profits
and patching problems with updates, avoided the
challenge and expense of immutable gadgets.
rise of smartphones and online-fueled global trade have
opened doors, though, most of them in the last five
more cellphones selling each year than desktops or
laptops ever did, prices of Wi-Fi chips, GPS sensors and
other technical parts have fallen. Devices no longer
need constant tethering to an electrical outlet,
mobility thatís stoking software vendorsí
imaginations. And because smartphones are always on and
nearby, theyíre an obvious anchor for a personal
factories now can turn around orders quickly, and thereís
no waiting for some massive hard drive full of
schematics to move by FedEx. Online ads and shops ease
distribution and marketing challenges.
developments decreased the money and time needed to
build products. Hazards remain. One miscue can devastate
multimillion-dollar investments, whether it be a
shipping company suddenly going bankrupt or a widespread
component spontaneously catching fire (just ask
biggest single thing for software people to grasp is how
expensive mistakes are in hardware," said Jeremy
Conrad, founding partner at hardware startup incubator
discipline is required from Day One in hardware, a skill
common among employees who have worked at big product
makers, he said.
too, software companies have benefited from the recent
demise of and subsequent layoffs at onetime household
names. Facebook, Google and Snap have hardware
executives formerly employed by the likes of
Hewlett-Packard, Nokia and Motorola.
for workers is still fierce, though.
growth at the big companies is so fast that thereís no
excess talent," Conrad said.
is developing virtual-reality headsets for watching
movies and playing games. Microsoft makes gaming
consoles and is branching into high-tech visors. Amazon
sells a speaker with a virtual assistant built in,
buttons for automatic ordering of household items,
internet entertainment access boxes and tablets. Uber is
working with automotive makers on self-driving cars and
describes efforts of Autodeskís tech peers as
exploratory. Each company wants to see if it can boost
sales and usage by introducing new ways for consumers to
more connection points, the stronger you are,"
Hanspal said. "They really want to be present at
all the points a consumer might decide to take a
a test, he says, of whether controlling the access lanes
is just as important as owning the highways.
STORY CAN END HERE)
the worldís most valuable public company, has
demonstrated the potential. The iPhone maker manages to
pull billions of dollars from sales of high-priced
devices and a growing sum from selling or taxing content
consumed on its products.
every company sees devices as moneymakers. For some, itís
a defensive mechanism. In building its Spectacles, with
a camera that posts video bites to its app, Snap reduces
its reliance on smartphone makers for distribution. It
could fear the day that Samsung builds a 10-second video
app into its smartphones and allows sharing to multiple
social media services.
the device-maker produces unmatchable advantages, said
Danny Crichton, an investor at Charles River Ventures,
which has more investments in hardware startups than
most venture capital firms.
self-made device opens new advertising lanes for Snap,
which is in cutthroat competition with Facebook and
Google for advertisers who are shifting spending from TV
to the internet.
been so much consolidation of attention to Apple and
Android on the devices side and to Facebook and Google
on the advertising side, that the desire of many of
these software companies to find a unique way to engage
customers is increasing," said Charles Golvin,
research director at tech consulting firm Gartner.
hardware isnít a perfect solution. Gadgets can become
cheap and indistinguishable over time. But the ecosystem
of product, service and large-user community is better
than any one of those on their own, Golvin said.
can be commoditized," he said. "The
competition can leapfrog you, but your customers are
secured by the services and community tied to that. Thatís
where you have to focus."
companies including Netflix and Spotify are choosing an
agnostic approach, making sure their apps are accessible
on whatever products come about. At some point, they
must ask, "Why live for a competitorís
device?" Crichton said. They could at least wade
into exclusive arrangements with existing product-makers
to shut out rivals, a tactic Google reportedly has
a Bluetooth-connected keychain that hails an Uber with a
press of a button and has a tiny screen listing the carís
type of exclusive device would be compelling for Uber
because users would be less likely to think about rival
Lyft, Crichton said.
experts say companies shouldnít stray from their core
identities with hardware. For Google, TVs could be OK,
but probably not coffee mugs, Conrad speculated.
also appear to have heeded lessons. A companyís
devices are generally compatible with those of other
manufacturers, unlike in the past, and theyíre all
more thoughtful about conducting trials, integrating
personalization and stunning with appealing aesthetics.
next big separator may be who nails the tech industryís
move toward predictive virtual assistants, Golvin said.
The company that anticipates peopleís needs and does
the best job fulfilling them could have the most
dominant hardware-meets-software ecosystem.