Very well could have been Google's strategy in high end devices as well with charging upfront for few services in the cost of the phone itself.

This just cuts into privacy as a marketing point for iPhone.

How exactly would Google have done that as a software company and not a hardware company?

By giving it out almost-free to OEMs, Google solidified the majority marketshare as the cost leader. That is much more strategic than dumping capex into manufacturing against an already established quality brand.