I don't mean to diminish the importance of working on phones, however interoperability (at least as a third party) is also important and "not losing contacts" is pretty much at the top of the priority list.

Hangouts failed both.

Google had (no longer has, IMO) the clout to design and drive a solid, open source messaging protocol with a reference implementation, sitting in the inbox of hundreds of millions of users and on hundreds of millions of phones. Instead, they created a slow, mediocre, closed source product that didn't interact well with their own video/voice calling system and fractured their own userbase between Hangouts, Google Talk, Google Voice and now even Allo.