With Google's driverless cars and phone with customizable parts being all the craze these days, we easily forgot the existence of Google Glass. Now, after Google's (NASDAQ: GOOG) announcement that it is temporarily halting sales of the Glass, the acknowledgement of such a product seems to be back: but just where was it for the past few months?
For most of the past two years, Google's new innovations in wearable tech were all over the news, updated regularly by constant notices by the company. Google had set up its first physical stores, called "Basecamps," dedicated to selling the Glass and training new users as the product underwent public beta testing. Yet around half a year ago, we stopped hearing about Google Glass. Companies which had originally viewed the Glass as a product with huge potential stopped developing their interfaces and apps for it; Twitter, an early embracer of the Glass, recently withdrew its integrated interface.
Pulling it off the shelf
It was only with the sudden announcement in November that Google was closing its recently opened Basecamp stores, and on Thursday that it was halting sales online as well, that the tech world remarked there had not been much news from Google regarding the development of the Glass. Compared to Google's more recent ventures into driverless car technology, its Glass seems to have stepped backstage. Although Google stated that it is still continuing development, focus in the sector has shifted to smaller companies developing cheaper and simpler alternatives, but also to bigger companies who have invested in making a competitor.
Above: One of Google's closed Basecamp stores (Source: TechRadar)
What was the problem with Google Glass? When it was released to the public during its beta testing stage, there were a few issues that prevented Google from smoothly and rapidly commoditizing smart glasses, and apparently impeded the development of products in similar wearable technology niches. The high price tag of $1,500, although emphasized as due to the product being in beta stages, was a deterrent to many potential users during a period of great publicity and excitement. There were also privacy and ethical issues with the use of the camera, which could be used to spy on people. Finally, it was viewed as a potential distraction while driving, and many states contemplated making it illegal to wear Google Glass while driving. After many of these issues, Google seems to have left the Glass alone, or at least out of public sight, instead of making vigorous efforts to foster and lead the development of a Google Wear product line.
As of today, users of Google Glass walking on the street seem to be rare. Competition is mounting from various small companies, beating Google in price, design, and simplicity. For example, Epiphany Eyewear's smart glasses are economically priced at $299, designed like a pair of trendy sunglasses, and have a simple, user friendly graphical user interface. They maintain basic but essential features, such as Facebook viewing, filling a sort of "side role" aiding phones, much like many watches. In addition, several large companies are creating competing products. Technology Giant Intel (NASDAQ: INTC), which is set to make the chips for Google Glass, has invested 24 million dollars into the development of its own smart glasses.
Above: Ephiphany Eyewear's smart glasses (Source: Wikimedia Foundation)
The future of Glass is not dead
After it pulled the Glass off shelves, real and virtual, Google has said that the Glass is still in development. However, the lack of news on Google Glass from Google itself seems to have sent public interest in the Glass spiraling down. Despite this, even though Google has lost most of its hype for Google Glass and potentially many sales to excited people, do not make the mistake of discounting it as a failure. Google has very strong brand value, and is still very much in a position from which it can surge from behind and regain a major stake in the smart glasses industry. It only costs about $150 to produce a unit of Google Glass, so after all the kinks are worked out, Google can easily slash the gross margin on the Glass, make them affordable for everyone, and start regaining the market. Especially with mobile revenue from search engine advertising set to grow, attaching a new and improved Glass in the future to phones would further strengthen Google's hold on both material and virtual worlds.
Above: Google's mobile search engine revenue is set to increase significantly (Source: Wall Street Journal)
Right now Google is trying to explore outwards, out from the cyber realm and into the material. Since the vast majority of Google's profits are coming from Google's online advertising presence, and it will likely be the same case for a very, very long time, Google has the resources to diversify its products. One way it has done this already is through its phones and tablets. In many ways, Google is like Apple with Steve Jobs. Google is trying to be one of the driving powers in innovation and is endeavoring to monopolize unexplored, untapped potential markets. With this, however, Google risks becoming Apple pre-1997 when it became known for too many unsuccessful products instead of concentrating on reinforcing its brand value by making a small number of amazing products and ensuring that this brand value drives its future successes in its main search engine cash cow.
Above: The vast majority of Google's revenue still comes from advertising (Source: BGR)
What will happen to other projects?
This whole ordeal with Google Glass begs the question: with a brand new Project Ara, the customizable phone, will Google abandon its advances in self-driving car technology just like how it shoved the Glass to the side? Although abandoning one of its projects will do next to nothing to the overall health of the gigantic company, Google should probably follow one principle for its new projects: don't let the excitement die down before real sales start.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.