During last Thursday's Allen & Company technology conference in Sun Valley, Idaho, Google's Eric Schmidt spoke about the company's growing role as a hardware producer. According to the New York Times, Schmidt proudly demonstrated the Nexus Q and Nexus 7 tablet while stating that — even now — Google is not a "hardware company."
However, that doesn't mean that Google isn't embracing a more hardware-centric business model. Apple's software services, like iCloud, are being delivered in the guise of consumer-targeted products while Google has traditionally opted to let third parties create physical products. Schmidt indicated that Google is ready to embrace a more hands-on approach to consumer products, saying that Google co-founders "Larry and Sergey have always wanted to do hardware in one form or another."
With a majority of its revenue derived from advertising, Google's renewed interest in its physical distribution channels could mean landing its software services in more hands. Between Project Glass and Google Now, Google is already in the process of expanding its online services into the more corporeal aspects of its customers' lives.