uploads///Google Other business growth_Q

Google Play Offsets Declining Hardware Sales in 2Q15

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Google Play continues to show strong growth

Google’s (GOOG) “Other” segment consists of its non-advertising businesses, including Google Play, Google For Work—for enterprises—and its hardware business. According to Google, the Google Play business continues to show strong growth, especially in emerging markets (EEM). During the July 16 2Q15 earnings call, management mentioned that in the last six months, Google Play has added more than 180 million users, placing it among the fastest-growing mobile gaming platforms.

Google Play has also benefited from an abundance of apps on its platform. According to a report from appFigures, Google had about 1.4 million apps in its app store in 2014 compared to about 1.2 million apps on Apple’s (AAPL) platform. Amazon (AMZN) was placed third with about 300,000 apps.

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Google’s hardware business continues to decline

Since Google Play’s business growth is mainly coming from emerging markets, the prevailing currency headwinds mean that the company’s Other segment’s revenue growth has slowed down. The chart above shows that this segment’s growth has slowed in the last few quarters due to the strengthening US dollar (UUP).

Another reason for the slowdown in the Other segment’s growth is Google’s declining hardware sales. Google reported slow Nexus 6 smartphone sales in 1Q15. During the 2Q15 earnings call, management mentioned that its hardware business continues to decline.

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