What made them big in the first place were the iPod/iTunes/iPhone and the ludicrous revenues from the App Store.
The iPod's only notable hardware that wasn't just a random off the shelf part was the click wheel, the chips were all off-the-shelf (until old iPhone chips counted as that), and iPhones didn't get custom chips until the 4.
So I guess the other part of the winning formula is "use market dominance in one sector to subsidize expansion into the next". I guess that's indeed one area where Google could reasonably try to be less inept, but I think all the institutional inertia makes that impossible by now. They'll go the DEC route of just drowning in their own internal problems until someone buys them up.
The iPod's only notable hardware that wasn't just a random off the shelf part was the click wheel, the chips were all off-the-shelf (until old iPhone chips counted as that), and iPhones didn't get custom chips until the 4.
So I guess the other part of the winning formula is "use market dominance in one sector to subsidize expansion into the next". I guess that's indeed one area where Google could reasonably try to be less inept, but I think all the institutional inertia makes that impossible by now. They'll go the DEC route of just drowning in their own internal problems until someone buys them up.