Google finally upgrades
When Google TV first came out we had high hopes that Google Inc. (GOOG) would deliver a dynamic product like Android. Instead, the project imploded leading one partner to ditch the fledgling project. The fizzle came largely due to the lack of third party apps/an app market.
Another major factor was the decision by television programming providers to jointly lock Google’s device out of their free online TV episodes [1][2][3], accessible on the PC. While Google could not have changed this directly, it took the blow of the blockade lying down, declining to air workarounds to spoof the sites into believing they were dealing with a PC and delivering content.
I. Google Promises TV Dominance in 2012
But at the LeWeb 2011 Conference in Paris, France, Google’s former CEO and current executive chairman, Eric Schmidt claims that by the end of 2012 Google TV will be on “most” TVs.
He comments, “By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded in it.”
If Google can pull that off it’d perhaps be the tech market’s comeback story of the year.
To accomplish that Google would have to win over one, if not two of the other top players in the Smart TV market — Sharp Corp. (TYO:6753), Samsung Electronics Comp., Ltd. (KS:005930), and LG Electronics, Inc. (KS:066570). Currently those three players rely on their own in-house solutions — some of which have app markets. Google’s TV build of Android is currently only the solution of choice of Sony Corp. (TYO:6758), who, at most, ranks as high as third in market share in its best sections of the television market.
It’s not infeasible that Google could cajole Samsung and/or LG into adopting its operating system with the proper financial incentives, but it would likely have to deliver both cash and a far more polished product. In some regards Google’s current Smart TV OS trails that of Samsung and LG — particularly in apps (Samsung has delivered over 1,000 third party apps, alone). Samsung, at least, is rumored to be in talks to adopt Google TV.
Along-side Mr. Schmidt’s presentation on Tuesday, Google took a big step forward by finally rolling out access to the Android App Market opening the door to a wide selection of third party apps. It also recently added exclusive access to Google Music, Google’s online storage locker that allows you to upload 20,000 songs.
Despite these improvements, it’s still fair to adopt a skeptical wait and see attitude regarding Google’s claims of market domination in the new year.
II. Android — “Ahead of the iPhone… in Volume… Prices”
Mr. Schmidt also sounded off on Google’s deficit in active developers, versus its chief competitor Apple, Inc. (AAPL).
While Google is drastically outselling Apple, although its growing sales lead has been briefly put on hold by the emergence of the latest and greatest iPhone, the iPhone 4s. Still, despite having almost twice Apple’s global market share, Google has fewer apps and developers. The latest November numbers [1][2] from Distimo, a web research firm reports 352,000 apps in the Android market, versus 450,000 for Apple.
But Google appears to be closing that gap, both in raw numbers and in developer sentiment (ex.: see Business Insider’s “Even For An Apple Fanboy, Developing For Android Is A Must”). But among top providers, though, Android still has a ways to go before it’s considered the platform of choice.
Mr. Schmidt says developers will come around. After all, Android’s new operating system (Android 4.0 “Ice Cream Sandwich”) will lead Apple’s offerings in nearly every single way, he argues. He states, “What kind of lead? Android is ahead of the iPhone now – by unit volume, with ICS features, prices are lower, with more vendors, more price points – do I need to continue the list? It’s free.”
He states, “Ultimately, application vendors are driven by volume, and volume is favored by the open approach Google is taking. There are so many manufacturers working so hard to distribute Android phones globally that whether you like ICS or not–and again I like it a great deal–you will want to develop for that platform, and perhaps even first.”
Indeed this argument seems plausible — less than a year ago Apple apps outnumbered Android ones two-to-one; today that lead has shrunk and Apple only has around 30 percent more apps, by most estimates.
As to Apple’s accusations that Google is riding on its coattails, stealing the look and feel of its operating system, he retorts, “Android was founded before the iPhone was.”
This is technically true, Android was founded in 2003, purchased by Google in 2005 and had a working OS prototype well before Apple. Of course both Apple and Google borrowed liberally from Nokia Oyj. (HEL:NOK1V) and others in their use of application grids, etc.
Mr. Schmidt did not comment on the dark horse in the race, Microsoft Corp. (MSFT). While Apple is clearly the biggest danger to Google’s mobile supremacy at present, Microsoft presents perhaps the biggest long-term danger, because like Google it uses the tried and true third party hardware approach. Microsoft has managed to botch things up to the point where it gets more revenue from licensing its patents to Android than it gets from Windows Phone.
But it seems inevitable that Microsoft will eventually parlay its polished product into sales, assuming it keeps investing to stay on the cutting edge of GUI and mobile OS design.
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