Android and Chromecast Will Replace GOOG TV

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Consumers’ hands are packed with tablets and smartphones, which means the living room is one of the biggest opportunities left in the consumer tech market. Not the TVs themselves — although rumors won’t die that Apple (AAPL) is poised to take a leap in that direction with its own branded television set — but the “box” that streams content.

All the usual suspects are involved in trying to grab a piece of this relatively low-hanging fruit, but one of the biggest players seems to be readying for a reboot. Gigaom thinks that Google (GOOG) is preparing to kill off Google TV. Once again, it looks as though Android fragmentation is one of the issues here, a problem that is increasingly dogging Google.

What is Google TV?

Initially unveiled in 2010, Google TV is a platform for connected televisions, based on a customized version of GOOG Android operating system. Initially, it used its own apps, which came pre-installed on Google TV devices. Hardware took the form of set-top boxes (á la Apple TV) and the OS was also incorporated in select Smart TVs.

Vendors ran into a problem almost immediately when the major TV networks blocked Google TV devices from accessing programming hosted on their websites or on the Hulu streaming service. Meanwhile buyers were complaining about a lack of apps for the service

One of the first Google TV set-top boxes was the Logitech (LOGI) Revue, designed to compete against the Apple TV. The Revue was announced with considerable fanfare and a $299 price tag. Despite having its price slashed within months to just $99 and receiving a new Honeycomb (Android 3.1) update to Google TV that gave owners access to Android Market apps, the Revue was a bomb. The device contributed to a Logitech CEO shakeup amid Revue-related losses.

Sony (SNE) was one of the other early supporters of Google TV, releasing television sets, Blu-ray disc players and eventually a set-top box that were Google TV certified. LG also released Google TVs and Samsung (SSNLF) displayed Google TV-equipped sets late last year, but instead of embracing the platform (it had previously used its own Internet TV platform), the company recently released its own Android-powered HomeSync set top box.

The Fragmentation Problem

Google’s Android platform has a problem with fragmentation, whether we’re talking about smartphones, tablets, smartwatches or TVs. Fragmentation means that even though there are a massive number of Android-powered devices out there, they can’t be treated as a single market. Different devices are running different versions of Android, and not all manufacturers release updates for their products, so TVs running outdated software are an issue. Some manufacturers (like Samsung) run customized versions of Android, and not all devices have access to Google Play and not all have access to Google TV apps.

In the case of televisions, that fragmentation was made even worse by GOOG itself through the creation of the Google TV platform — a customized version of Android with features that lag current releases of the operating system.

The net result of fragmentation is hesitant developers and cautious hardware partners amid high potential for a poor user experience.

Last year, TechCrunch’s John Biggs wrote: “I feel like we’re watching Google TV roll by and off into a nearby ditch,” speculating that Google’s lack of new development in the platform signaled that “they’ve scrapped the project but don’t want to tell their partners.” It seems as though he was right.

Reboot

While it risks taking a branding hit by doing so, GOOG appears to be on the verge of sunsetting Google TV and instead relaunching its TV efforts under the Android banner.

While this doesn’t prevent Android fragmentation altogether, it does free up Google from maintaining a separate platform, and it plays into Google’s goal of convergence between its operating systems. At the same time, it can proceed with initiatives like the popular Chromecast plug-in streaming device.

In fact, going the Chromecast route means GOOG can achieve its primary objective — driving ad revenue by having TV watchers use Google services such as its Chrome browser and YouTube — without having to convince TV or box manufacturers to adopt Google TV over their own platform. Consumers can plug in a Chromecast, regardless of what powers their television or whether it’s even a Smart TV in the first place, while Google controls the experience with no third-party customizations or waiting for a TV manufacturer to roll out upgrades.

And incorporating TV-friendly features in stock Android (as it’s reportedly doing with the upcoming 4.4 KitKat update) means TV manufacturers might be more tempted to adopt stock Android over their own “smart” systems.

A Research and Markets reports says the Internet-connected-TV market was at 115 million sets at the end of 2010 but is expected to hit 759 million by 2018. In the midst of this rapid growth, Apple is continuing to gain traction in the living room, Amazon (AMZN) is reportedly working on its own set-top box, and video game giants Sony and Microsoft (MSFT) are hoping to make their upcoming consoles the center of a connected living room.

Google would dearly love to be on the majority of those TVs, but it was being held back by Google TV and a poor user experience caused by Android fragmentation. The GoogleTV website is still live, but the device seems destined to be replaced by one hawking Android’s TV-friendly features and Chromecast.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


Article printed from InvestorPlace Media, https://investorplace.com/2013/10/goog-tries-google-tv-reboot/.

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