Cnet : Google doesn't need to make money from hardware, but it does need hardware to make money from its services. That's why it designs new hardware.
It's what's called "branching into another business". Companies always look to expand their business, to gain a stronger position in the market, by having a strong position in multiple markets. This helps with cash flow (e.g. you won't end up having big piles of cash with which you can't do anything), and helps solidify the business. The redundancy created by this tactic allows the business to step out of a market if that particular department is doing poorly. Virgin is probably the most obvious company to do this. They have trains, gambling companies, coaches, broadband, space travel, airlines and more - Is there any chance that Virgin will go bankrupt? Compare that to the chances of say, Nintendo going bankrupt. What happens if the Wii-U sells poorly? What happens if people stop buying tickets for Virgin trains?
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