Google becoming a hardware manufacturer isn't a threat — yet

Not everyone liked the Google Glass -- even the tech giant itself admitted regrets in how it executed on the hardware push. Last month, it closed Project Ara, its initiative to build a modular smartphone.

The six-year-old Nexus program proved more fruitful, but as of this week, Google has no more plans for a new Nexus phone or tablet, The Verge reported.

But Alphabet Inc. isn't abandoning hardware. Rather, it's going all in on a new strategy: Offer everything under one brand name.

On Tuesday at an event in San Francisco, Google revealed its program called "Made By Google." The homepage of its new website is a tribute to a suite of products: Phones, home speakers, Wi-Fi routers, virtual reality headsets and a new TV device.

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In this way, Google is pitting itself against nearly every major tech company. Google's new phones Pixel and Pixel XL could make a play for customers of Apple, Microsoft and Samsung devices. The home speaker Google Home is an answer to Amazon's Echo. Daydream is a much more technical VR headset than Google Cardboard and comes after Facebook's Oculus and Samsung's Gear VR.

Google's big bet is that one can only be king if they rule them all, as in offer hardware and software designed, manufactured and updated in house, for the most part.

"That's a huge capitulation to a notion Google had long resisted – that both hardware and software are better when they're built together by the same company," Jan Dawson, chief analyst at Jackdaw Research, wrote in a research note.

But it is a strategy that analysts are supportive of as they watch Google expand as a software provider, offering much more than just a search engine and ads. Investors have feared Alphabet's core business struggling in the wake of Facebook's fast growth in the online ad industry.

“In our view, Google's ambition here is not merely revenue growth, rather the devices will serve as a top-tier hardware platform to showcase and drive usage of Google's best-in-class software services,” Brian Fitzgerald, equity research analyst at Jefferies, wrote prior to the event.

That posits Google in direct competition to Apple.

Former Google CEO and now executive chairman Eric Schmidt tweeted in support of the device push.

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For Google, it doesn't just depend on earning revenue from retailing devices. The closer cooperation could help inspire more innovation within its walls.

"I think Google wants to better control the releases and push the tech envelope on AI / machine learning / voice recognition capabilities, so they want to take things into their own hands. Bringing in control will help Alphabet," Jeff Fieldhack, analyst at Counterpoint Research, wrote in an email to Mashable.

Cooperation evidently was not as easy under Google's previous setup. “While we were part of Google, we were very arm’s-length,” Rick Osterloh, head of Google's new hardware division, told Bloomberg, speaking of his previous role as head of Motorola.

What about partners?

When it comes to phones, at least, Google is not leaving behind other manufacturers who rely on Google's Android software -- at least not yet.

Google executives did not give a public nod to any of its partnering device manufacturers during its presentation, despite the fact that HTC is working with Google on Pixel. Yet, Google's hardware chief and Android head speaking to Bloomberg ahead of the event, reaffirmed the company's support.

“Samsung is a very important partner, as is LG, Huawei and so on,” Hiroshi Lockheimer, senior vice President of Android, Chrome OS, and Chromecast, told Bloomberg. “Samsung tells us confidential information about their product line, their plans. We won’t tell LG that, and vice versa. That continues. Everyone is treated the same, including Rick [Osterloh]’s team.”

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Google's hardware launch was ambitious, but its distribution is limited for the moment -- meaning it won't be broadly competing with its partners at first. The company made exclusive commitments as part of its push. For instance, Verizon will be the exclusive carrier of Google's Pixel phone in the U.S.

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Pixel and Google's other hardware should not come as an immediate concern to top Android device manufacturers.

"Rounded icons and faster software updates won't be enough to offset the premium pricing, narrow carrier distribution, and consumers' familiarity with Samsung and other existing vendors," Dawson wrote.

Samsung's stock was up by 1 percent in after-hour trading, despite Google's announcement and the company's own hardship in the wake of a massive recall of the Galaxy Note7.

Huawei stock was down by more than 2 percent, a sign that there is at least some concern over the long-term prospects of companies having to compete with Google.

"They go at it on their own and have such brand power," Fieldhack, the analyst of Counterpoint Research, wrote. "Marginal and tier 2 and 3 suppliers fighting to break even and differentiate will probably be more irked."