"People who are really serious about software," the visionary computer scientist Alan Kay declared in 1982, "should make their own hardware." His advice is widely cited in technology circles--and routinely ignored. Among the big players, only Apple has consistently designed its devices top to bottom. That's why it provides the most seamless consumer experiences in the business and dominates the digital-entertainment market. Now that Apple is the planet's most profitable tech company, Google and Microsoft--two outfits that got huge from software and services rather than physical products--are showing a newfound interest in hardware.
Of course, it's tricky for them to do this without ticking off the hardware companies they already partner with. Google has even said flat out that it won't give preferential treatment to Motorola Mobility, the phonemaker it just acquired for $12.5 billion. Instead, Google will keep working in close collaboration with handset makers to create co-branded products based on its Android operating system, such as the Samsung Galaxy Nexus phone and the new Asus-built Nexus 7 tablet.
But in June, Google announced it would start selling the Nexus Q, a $299 media-streaming gizmo that doesn't compete directly with anything manufactured by its partners. It's the first consumer device to feature Google-designed hardware; it's even made in a facility near the company's Silicon Valley headquarters. Resembling an overgrown Magic 8 Ball, the Q has no buttons or switches. Cable hookups let you connect an HDTV and speakers and stream songs and videos from the cloud via wi-fi. Its big selling point is its sociability: any guest with a smart phone or tablet can add to or reorder the host's playlist. The catch is that those phones and tablets have to be running Android software, and they can fill the Q's queue with music, movies and TV shows only from Google's Play store and YouTube.
The Q is stylish and imaginative--a colorful band around its belly pulsates in concert with music--and so far, interest is outstripping demand. But early reviews slammed the software as baffling and far more limited than the $99 Apple TV box. On July 31, Google announced that it was delaying the Q so it could add more features.
Microsoft has bolder plans for hardware. When Windows 8 ships in October, the operating system will arrive, as usual, on PCs from Dell, HP and other companies. However, it will also be available on Surface, a wildly ambitious line of tablets that Microsoft has created from scratch. A nearly flat keyboard doubles as a cover, connects to the tablet magnetically and uses sensors to provide what Microsoft claims is remarkably comfy typing. Much remains unknown about Surface, including its price. But by attempting to build the next great PC, Microsoft has already dropped a bombshell on the industry it helped invent. Other makers of Windows computers will have to prove, in effect, that Kay was wrong. I wouldn't bet against him.