During the second quarter of 2015, Google reported selling $16.023 billion worth of advertising -- 11% more than the second quarter of 2014. Advertising is their bread and butter, but "other sales" grew by 17% to $1.704 billion.
I don't know how "other sales" breaks down, but a chunk of that is hardware devices like the Pixel Chromebook, Chromecast, Next thermostat, Nexus phone and, now, WiFi routers.
Google's first WiFi router, the OnHub, is being built by Chinese manufacturer TP-Link and ASUS will have one later this year.
With the exception of the Chromecast, Google seems to be going for high end devices, but does the world need another $200 home router? Why would Google bother? I can think of a couple of strategic reasons.
For one, Google has an eye on the home automation market -- controlling things like their Next thermostat and your TV set. The OnHub has the potential to become a network-connected home automation hub -- like the Amazon Echo -- which sits in your living room and listens for commands like "turn on the bedroom lights" and "lock the front door."
The OnHub lacks the Echo's microphone, but maybe the ASUS device or OnHub v2 will take care of that.
The second strategic advantage is that, since the device is online, Google will be able to dynamically tune it for maximum performance. Google will be able to monitor your network and change GoHub parameters and firmware. You will also be able to control the network more effectively, for example, giving a streaming video in the den priority over email in your home office.
Being able to improve your WiFi performance is a nice feature and, the more time you spend online and the less time you spend waiting for content, the more ads Google will be able to show you.
There are many comments on this post on the Slashdot Web site. Some worry about Google's ulterior motives:
They want to be able to mine your data at the lowest possible level, have a handy backdoor available in case the NSA comes calling, and so they can insert their own ads on every page of every website you ever browse.These worries are contradicted by this comment:
There is no way in hell you should be trusting a Google which has remote access to your network, home automation, doors and every other thing Google thinks they're going to sell you.
They want to control your network. They want to inject advertising into everything you do. They want you to have no choice but to use DNS servers they control.
Trying to inject advertising into your internet stream would be a ham-handed approach the idiots at Lenovo would try. Google is more clever than to slit their own device's throat with something so stupid as that. (Note that Lenovo was caught injecting ads and I suggested that selling more ads would be a nice side-effect of improving speed, but agree that Google would not inject ads on their own).
I know a couple of people who were involved in the development of OnHub and, FWIW, they say that the motivation was that there's a need for a Wifi router that performs better and is more secure. Not a strategic bet, just a perceived market opportunity which they thought Google was well-equipped to fill.Check Slashdot out -- there are many more comments.
With regard to performance, the antenna design of the OnHub is supposed to be dramatically better than anything else on the market, and the device incorporates ideas from the Software Defined Networking stacks Google developed internally for its data centers, to optimize data flow. I wouldn't have thought there was much you could do to make Wifi work better, since the ISP connection is generally the bottleneck, but apparently there is. With respect to security, it adopts a number of ideas from ChromeOS, plus fully-automated updates. Probably the biggest security benefit compared to the competition is that security is actually a primary design goal, which isn't the impression I get from makers of home routers.
We'll see if OnHub actually is enough better than the competition to justify its premium price. Based on what I know of the people working on it I expect that it will. I ordered one.
The FCC is considering new rules that would ban WiFi firmware modification. I guess the FCC is worried about hacking or perhaps increasing power beyond legal limits, but, if passed, the regulations would limit the ability of companies like Google and Amazon to upgrade their Internet-connected home hubs.
The FCC is open for comments on this proposal through early morning, September 8.