Google is working on a branded home entertainment system designed to wirelessly connect Android devices to Google-designed speakers and stream music throughout the home, according to a report in The Wall Street Journal.
The device would be marketed and branded under the Google name. The system would offer streaming music content from a Google music player in addition to other media content. It’s a move that would intensify its rivalry with entertainment device companies such as Sony and Panasonic as well as Apple and its digital music offerings and Apple TV device.
Google has been teasing a home entertainment system for a while. It displayed an Android-controlled music system called “Project Tungsten” at the I/O developer conference last May. Google also filed a request with the FCC recently to test an entertainment device.
A device could come in late 2012, according to the report. Google did not respond to our requests for comment.
Ecosystem Creation
The upsides to a successful venture in the field could be alluring for Google. A great system could put it in an enviable position atop consumer device and digital content markets, important especially as electronics, cloud services and content become more intertwined.
“There are a few possible reasons for Google’s launch of its music service. It could add value to existing business, such as Android and search, and start to create an ecosystem that could prevail in the future’s connected homes,” Jia Wu, senior analyst at Strategy Analytics told TechNewsWorld.
That connectivity could get a hand from some of Google’s recent acquisitions. The company’s Motorola Mobility buy could prove useful. Motorola’s products include cable set-top boxes and home digital video tools.
Google is also experimenting with chips that can connect wirelessly and be used across Android devices, all perks that would fit well into a home-entertainment system.
Qualcomm recently released its Snapdragon processor for smart TVs and digital media adaptors that can also support Web browsing, remote access and gaming, as well as file-sharing across TVs, tablets and smartphones. The chip supports Android apps.
“With the chip ecosystem emerging to allow Android devices to work across boundaries in the home, Google will offer hardware and software that will work well together to provide services such as access to Google’s Internet music and YouTube shared among Google devices,” Christopher Taylor, director of RF and wireless components for Strategy Analytics, told TechNewsWorld.
Outside of Google’s Comfort Zone
To pull off a winning home entertainment system, though, Google would face considerable challenges beyond coming up with the right hardware and software.
“It’s a weird little niche that’s dominated at the high-end by the Cedia-type installers to the mid-range products of Sonos and Bose, for instance,” Mike McGuire, vice president of media research at Gartner, told TechNewsWorld. “And for the kinds of consumers who place a value on music consumption with decent fidelity, the audio market is a very, very tough market. I don’t see where or how Google’s acquired any particular expertise in this area.”
Google may be top of the search heap, but the consumer device market is another story. The company rarely ventures into that market, and even in its series of Google Nexus smartphones, partnering manufacturers like HTC and Samsung are given prominent billing. It’s put its name on other products like Google TV, which has so far mostly failed to gain traction.
“Google has a rather spotty track record when it comes to consumer electronics,” said McGuire. “Companies don’t succeed without a few failures, but aside from their enterprise search server appliance, Google has not excelled when it comes to consumer hardware.”
Even if it can create a viable competitor in the home-entertainment industry, Google has its hands in other much larger markets that are more likely to have a greater impact on its immediate bottom line. Strategy Analytics estimates that in 2012, about 6 million home audio device units will sell worldwide. If a Google audio system is part of that number, it could be a nice bump for Android devices, but that’s a relatively small bump compared to the market of 700 million smartphones that are expected to ship in 2012.
As far as revenue, Google’s already way ahead of the home audio device industry as well. Strategy Analytics estimated that home audio devices accounted for about $1.1 billion of the total $8 billion in home audio sales over 2011. Google reported revenue of $38 billion in 2011.
If a home-entertainment system is truly in the works, Google might be looking at the bigger picture of adding small ways that Android devices, a Motorola acquisition and some of its content acquisitions such as YouTube can continue to play a bigger role in the company’s growing ecosystem.
“I think Google is more likely playing a big strategic game, and this is just one of the steps it needs to take. But looking at this event in an isolated view, it will not change the company’s financials and competitiveness in the short term,” said Wu.
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