Google TV, a potential juggernaut still misunderstood by many

In a recent post on the DisplaySearch Blog, the merits and challenges of Google TV in today's competitive environment were discussed. Though I agree on some of the points made, there are several where I politely disagree:

10/22/2010


IMS research: excellence in market intelligneceIn a recent post on the DisplaySearch Blog, the merits and challenges of Google TV in today's competitive environment were discussed. Though I agree on some of the points made, there are several where I politely disagree:

First, I don't believe Apple TV and Roku boxes are realistic threats to Google TV.. they’re hitting two completely different markets – people looking to buy sets are not the same as those looking to buy a peripheral / A/V component in terms of budget or what they’re browsing in the store. I mention this since the weight of Google's push at retail is going behind integration into TVs and less so standalone retail STBs.

I see the idealized situation in the near term as TVs with Google TV, priced at a $100-200 premium over the non-Google version. For those looking to buy a new TV and who are somewhat interested in OTT and/or Google TV, they are likely to pop for that premium to get integrated functionality vs. getting a separate STB. Given that there will be integrated Google TV products at CES from a variety of the major CE companies along with Sony, and the collective objective is to spread the functionality across TV set screen sizes over the next couple of years, this premium is likely to decrease substantially over time.

Second, Apple TV is not even a good alternative for $99 – the biggest competitors in that price range are the new generation Blu-ray Disc players that have MORE services available than Apple TV and give you BD playback on top of that. Playback of shared media on your home network generally starts at the $150 priceband, but will move down to the sub-$100 priceband by the holidays. Let’s not forget all the installed Xbox 360’s and Playstation 3’s out there that already offer more functionality today than Apple TV or Roku.

In my eyes, I see the oxygen for the $99-and-below over-the-top boxes running out over time as more devices either new or already installed, integrate similar or greater functionality (and greater value to the consumer). By the same token these are a threat to Google TV’s adoption as well, if it doesn’t convince the consumer that it truly is something different when it comes to delivering a richer experience.

That brings me to my last point. I disagree that Google TV's main differentiation lies with full internet access and the open development platform – No…. what Google brings to the table that hits the consumer functionally the first time and every time they use Google TV  is content search and discovery. This is functionality they are committed to extending to all of their content partners' clients on the platform (e.g. Netflix). It is their special sauce, and it is also the fundamental piece to the Google TV experience – you can find content seamlessly across different sources including the Internet. To me, this is the main functionality that distinguishes what Google is doing, when you’re using it, as something that’s greater than the sum of its parts.  The applications and web access are nice, but we forget that the core reason people sit down in front of a TV set is to watch video. The ability to search, discover, and consume content is the linchpin of keeping that viewer engaged in front of that TV, and that is precisely what Google TV does better, and on a broader scale, than any product that's come before.

As the battle to deliver an integrated and compelling connected TV experience continues to heat up, I think a few more surprises are in store, as certain CE companies debate the cost of developing and supporting their own platforms, applications, and content plays. Over time the public might be very surprised to see just what level of inroads Google has made into the consumer electronics space. The 2011 CES will help reveal exactly how far Google is going - to places Apple at this point cannot.



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