Source: Google Glass
As much as Alphabet (GOOG +0.41%) (GOOGL +0.66%) is compared to Apple (AAPL +2.08%), in actuality the companies are very different from a monetization standpoint. For Apple, the company monetizes its ecosystem to primarily profit from sales of higher-margin devices. On the other hand, Alphabet primarily relies on third-party device makers to profit from the data extracted from searches and its Android-based ecosystem.
It's not that Alphabet hasn't tried to profit from devices -- it just hasn't been successful. Perhaps the highest-profile attempt to compete with Apple was when Google purchased Motorola's Mobility business for $12.5 billion only to sell it less than two years later for a figure under $3 billion. And although the company kept valuable patents and sold off some of the business earlier, making the headline comparison perhaps an unfair comparison, it's safe to say the purchase did not further the device ambitions of the company now called Alphabet.
That said, Alphabet hasn't stopped in this industry. The company continues to develop and market its Nexus line of smartphones, announcing two new models at its Sept. 29 event. In addition, it seems the company is continuing to work on its most ambitious device yet: Google Glass. But, apparently, it's dropping the glass.
Glass without the Glass?
Per technology-focused website The Information, Alphabet's secretive Project Aura is continuing to perfect its Google Glass product. An earlier report, corroborated by The Wall Street Journal was that the company continued to work on its Google Glass project, but changed its target audience. Unlike the initial rollout, which was focused on mass adoption and never caught on in a meaningful way as it lacked a defining purpose, the newer version of Glass is reportedly focused on enterprise-related users through its Glass at Work project. The line-of-sight camera and hands-free interface make the device a natural fit for training-intensive fields such as surgery, flight training, and police/military-focused operations.
However, the newest report from The Information adds a new device in addition to the enterprise-focused Glass unit. And the new device appears to be without a visual interface and is audio only and focused at sport users. And why it's cynical to note this new "device" essentially sounds like headphones with a mic, The Information reports that Alphabet will bring its top-notch features like bone conduction to transmit sound. It's unlikely Alphabet would waste its time simply developing simply a set of headphones.
Will this change Alphabet's device trajectory? Probably not.
If you're expecting this to change Alphabet's device-related operations, don't. If anything, a transition away from Glass as a mass-market device shows the limits to the device. The transition to the enterprise essentially amounts to reduced expectations. Compare that to Apple's newest wearable, the Apple Watch, which continues to be a mass-market device, and you see that Alphabet is still behind Cupertino as it relates to device supremacy.
But, as previously stated, it isn't as if Alphabet is reliant on device-related revenue like Apple is. As such, the search-engine giant can benefit by pushing more Internet-connected devices into the market to perform more data extraction and search-related features. It's good to see Alphabet continue to compete in devices, though, as a competitive market benefits all consumers.
