Can Google resurrect its TV platform?

Posted by Trent Nouveau

Google's recent acquisition of Motorola Mobility could potentially allow Mountain View to significantly expand its fading presence in the competitive set-top box market.

"Google's acquisition [may] pay off in the set-top box space, especially because the company's own Google TV smart television products seemed headed to an early grave in the wake of a steep dive in pricing," IHS researcher Roque Muña told TG Daily in an e-mailed statement.

Can Google resurrect its TV platform?"Motorola currently is No. 2 in set-top box shipments, and the inclusion of Google TV in this already successful line of products will give Google access to an already established customer base."

Perhaps not unsurprisingly, Google TV is currently struggling to gain traction. For example, the MSRP for Logitech's Google TV-enabled Revue set-top box has plummeted by 60 percent%, with Sony's integrated Google TV sets experiencing similar price drops.



Then again, the televisions and set-top boxes for both Logitech and Sony were prohibitively expensive devices that lacked any real content to meet consumer demand.  


However, the new value to be created from the combination of Google TV and Motorola set-top boxes will likely appeal to current customers - as long as the new mix doesn't detract from users' current mode of accessing content. 
In short, Google TV-enabled set-top boxes will enjoy solid growth - if they manage to maintain current functionality and are appropriately priced.

"Integration across several platforms is a driving trend in the consumer electronics market today, with Apple being the leader in this area. Google TV in set-top boxes brings another point of integration into the home. Google TV in set-top boxes brings another point of integration into the home," Muña explained.

"Similar to Apple TV, Google will have the flexibility to integrate its newly acquired mobile and tablet platforms with televisions, giving consumers access to Google TV content while possibly providing a secondary interface for apps in the Android market. Furthermore, while Apple TV has been called a mere 'hobby,' set-top boxes are already a staple product in households, giving Google TV the foothold needed to inundate the market."



According to Muña, the real challenge in integrating Google TV with Motorola's set-top boxes is actually the cable operators - as Google TV could well impact the operators' average revenue per user if it allows customers to bypass or eliminate paid media offerings.

Indeed, once Google TV provides access to a generous amount of free content, the likelihood of customers continuing their cable subscriptions will drop significantly. Without an innovative business model to reconcile the two means of accessing content, operators that sell set-top boxes from Motorola Mobility likely will oppose the adoption of Google TV into the devices.

"[Nevertheless], at this point, even if Google TV doesn't increase its content, the capability to have an Android ecosystem in the home may be sufficient to satisfy customers," said Muña.

"[Meaning], as long as Google provides a value-added product at a price similar to what Motorola customers are currently paying for their set-top boxes. [Of course], what will be more difficult will be convincing cable operators to sell a product that possibly could cannibalize their business."

It should be noted that the Internet-enabled television and set-top box market is projected to more than triple in four years, with global shipments projected to reach an impressive 295.9 million units in 2015.