Google Chairman Eric Schmidt said at the Allen & Company Sun Valley Conference, an annual retreat Apple CEO Tim Cook also attended, that it was always Google’s intention to make its own hardware though he didn’t go as far as to call the search giant a hardware company. But in reality, Google more than just dipped its toes in hardware..

Schmidt told The New York Times at the conference:

We always wanted to be in the hardware business. Larry and Sergey have always wanted to do hardware in one form or another. This was a way to get into it quickly.

I’d add that with its $12.5 billion purchase of Motorola Mobility, Google has officially become a handset maker.

On that acquisition, Schmidt commented:

While Mr. Schmidt acknowledged that Google purchased the company and its patents, in part, as a reaction to rival “Apple’s behavior,” he said its hardware business was a real draw. Mr. Schmidt was tight-lipped about Google’s plans for Motorola but he promised that a new batch of products were nearly ready for prime time.

But Motorola phones are just a tip of the iceberg.

Google-branded hardware includes the Nexus family of devices made possible through close partnerships with hardware makers that engineer and manufacture gear according to Google’e blueprints.

These include the Galaxy Nexus, a Samsung-made smartphone which offers so-called stock Android experience, the Asus-made Nexus 7 tablet which seems to have gotten off to a brisk start across retail chains, the Nexus Q media streaming device and the Glass Project, an experimental wearable computing device.

Google also customizes its own servers in data centers (and designs them with environment and energy efficiency in mind), produces a backpack-worn camera that captures street-level imagery in places where one can only walk and operates a fleet of airplanes that capture three-dimensional views, soon to be available in the forthcoming update to its mobile Google Earth app.

And of course, they tap third-parties to make Chromebooks, inexpensive netbooks for online use built around flash storage and Google’s Chrome operating system.

Google is not a hardware maker per se in a way Apple is because it doesn’t (yet) manage the supply chain or commission Asian contract manufacturers to assemble its products.

Nonetheless, clearly Google is big on hardware. While it’s less involved in hardware production itself, Google relies greatly on third-parties to build a bunch of devices optimized for its services. And nearly all of the Google-branded consumer products were conceived in Mountain View, California.

I guess you could say that Google is becoming a designer of gadgets which doesn’t (yet) leverage a hands-on approach to hardware engineering as Apple.

And when you think of it, it does make a lot of sense for Google to take a more hands-on approach to designing consumer products just as Apple is taking a more aggressive stance with online services, traditionally Google’s home turf, with its own mapping service and the iCloud platform.

The bottom line: as Google and Apple take on each other’s respective core strengths, we should benefit from increased competition giving birth to a greater number of integrated, streamlined and beautiful products that “just work”.