Hiroshi Lockheimer Is Explaining Google's Hardware Bet to Android Partners

Android chief Hiroshi Lockheimer already has a tough job. When his old friend Rick Osterloh joined Google parent Alphabet this year to lead the company's big new bet on hardware, Lockheimer's task got even harder.

Google is making its own high-end smartphones now, like Apple, and it unveiled the first of these devices, the Pixel and Pixel XL, at an event in San Francisco on Tuesday. That's a huge change from the way Google has operated in the mobile business since it launched Android as a free, open-source operating system that phone makers like Samsung and LG use to run their own devices.

Lockheimer recently spoke with Bloomberg at Google headquarters in Mountain View, California about the new hardware focus and how he's going to keep Android partners happy as the company increasingly competes with them. Edited excerpts follow.

Bloomberg: These Pixel phones are expensive. Are you trying to crack the high-end smartphone market -- where Apple has done so well and Android has struggled?

Lockheimer: Premium is a very important category. Having a healthy premium device ecosystem is an important element in an overall healthy ecosystem. For app developers and others. It's where certain OEMs have been successful, like Samsung. It's where Apple is also very strong. Is there room for another player there? We think so. Do we think it's an important aspect of Android? Yeah, absolutely.

Bloomberg: What was the genesis of the Pixel phone? When and why did it get going?

Lockheimer: It's something we've been thinking about for a while now as the intersection of hardware and software is more important than ever before. It was around the time we had to decide whether to kick off another Nexus device, or do something else. Conversations were happening in the summer of last year and the decision was made sometime in the fall. Phones typically take about 12 months now. The last 12 months have been very different for us. With Pixel, there was industrial design, mechanical engineering, even electrical engineering, component selection. These are things that the software and hardware teams did in tandem.

Bloomberg: Could Google have done this under the Nexus program?

Lockheimer: Being a platform provider and knowing a manufacturer on the other side will take your platform customize it and commercialize it -- that's one model and it's worked great for us at massive scale. That is a different kind of engineering than Rick's team. We'll continue to develop the platform -- that's my job. Rick's team will take that to a level of completion, polish, thoroughness that a platform by itself in abstract won't get. That's a pretty big shift. The Nexus devices have been the purest form of Android in the past. Pixel is the purest form of Google, which is Android plus a whole lot of other stuff like the Assistant, our VR platform and so on.

(Also see: Nexus Series Discontinued; All Products Removed From Google Store)

Bloomberg: Are you killing the Nexus program?

Lockheimer: One of our most popular Nexus devices was the Nexus 5 from two, three years ago now. The reason it was so successful was because we were able to provide a phone with LG that hit the sweet spot in terms of price and performance. Fast forward to 2016, there are many manufacturers out there who are doing that. Now, if Google were to have an opinion about phones what would we do? It's the deep integration of Google technologies. That's where Pixel will be different. Android manufacturers have their own ideas about what they want their phones to be about and we respect that. I don't want to close a door completely, but there is no plan right now to do more Nexus devices.

Bloomberg: What are your Android partners going to think about Pixel?

Lockheimer: I felt strongly, and I know Sundar (Pichai, Google's CEO) believes strongly in this too, that there needed to be a clear separation in responsibilities. Hence Rick. He is the SVP responsible for Google's first-party hardware efforts. It's not me. That's intentional because my job is to work with our partners.

(Also see: Google Pixel Phones Target Apple, but May Hurt Samsung)

Bloomberg: What have you said to Android OEMs?

Lockheimer: They understand. They've seen Google evolve. We did Chromecast, we've done Google Glass, other hardware projects. It's not like they're not seeing that. They've asked us questions like this in the past, when we did Nexus. They also did that when we purchased Motorola. We worked with Motorola, during the time they were a Google company, in an arms-length fashion. They were another Android OEM, just like Samsung is a partner. That worked fine. I remember talking with someone at Samsung about that. He asked me the same questions and I told him what I just told you. He said 'OK I understand.' They're still with us four, five years later. Android as an ecosystem has grown significantly since then. That gave us the confidence that we can do this.

Bloomberg: Wouldn't it make more sense for Google's new hardware team to get Android updates and features, and Google apps, first, rather than treating them just like Samsung and other partners?

Lockheimer: Rick's team will use our platform, but they will also work very closely with Google's Search team, or the Maps team, or the Assistant team in ways that perhaps other OEMs may not want to. Other OEMs may want to differentiate and do their own thing, their own Assistant for example.

Bloomberg: Are you operating this way to appease Android partners?

Lockheimer: No. I look at it differently. There are at least three teams involved. The Android team, the hardware team, and then Google services teams, whether that's Gmail, Maps, the Assistant, whose job it is to get on as many platforms and devices as needed. We have very clear guidelines. Samsung tells us confidential information about their product lineup, their plans. We won't tell LG that, and vice versa. That continues. Everyone is treated the same, including Rick's team.

Bloomberg: Is that weird? You and Rick Osterloh are old friends.

Lockheimer: It's a little awkward. But we're professionals. We focus on the job. It's incredibly helpful because we have an understanding and a history with each other, so we understand it's not personal, it's just business.