Google TV Must Battle Market Confusion



This week, LG joins Sony in delivering to market a Google TV line that brings the Android platform to the big screen with a new brand.

But market analysts said that LG and Google will have their work cut out trying to make an Apple TV-like stir around the alternative smart-TV platform.

A badly executed early launch left Google’s Android system for TVs struggling to whet consumer appetites, despite claims to provide seamless integration with Android mobile devices and a PC-like browsing experience on the TV screen.

After almost two years in the market, sales of initial Google TVs from Sony and Google TV-enabled set-top Revue boxes (the latter of which is now discontinued by Logitech but announced as coming soon in a new form from Vizio) remain small niche items of a North American connected TV market.

Paul Gagnon, NPD DisplaySearch North American TV market research director, estimated that connected TV now reaches about 35 percent of the North American market, up from 22.5 percent last year.

“A number of factors have hindered success of Google TV, but primarily the industry’s emphasis on 3DTV and the variety of connected platforms competing for consumers helped to bog down overall adoption,” observed Tamaryn Pratt, Quixel Research principal. “Most of the big manufacturers want their own ecosystem or taste of the Apple success, and it almost seems like this is a backup scenario.”

Most analysts agreed that consumers are confused when they hear two stories about Internet-enabled TV from one manufacturer, like Sony, as the company continued to market a line of Bravia Internet Video TVs as it unveiled its competing Google TV alternatives.

It appears LG is about to do the same thing. It already offers lines of TVs empowered by the LG Smart TV system, which the company promotes vigorously. That system offers links to a number of premium steaming-movie services, including Netflix and Vudu, while LG Google TVs lack Vudu but offers Netflix, HBO Go and Amazon on Demand.

Tom Morrod, IHS TV technology senior principal analyst, said, “Betting on Google TV isn’t the same as betting against your own platform yet. It’s simply a hedge on the basis that Google might be a winner here, and if it happens, it could happen quickly, such as with an Apple TV launch.”

Still, analysts said that adding two IPTV systems under one brand risks making the purchase proposition confusing not only for consumers, but retailers as well.

“It does send a mixed message. If [the dual IPTV platforms are] not clearly messaged by manufacturers, it adds another layer of complexity in the decision making process,” Pratt said. “Clearly, it would be a great scenario for smaller TV brands as a quasi-standard, and that may in fact help the overall penetration of Google TV.”

Morrod of IHS said that some manufacturers’ proprietary connected-TV platforms are doing well, particularly Samsung’s, “but there is consumer demand for a clean platform to choose from and to use across all devices and across all the TVs in their home. Google TV/Android-based TV does this nicely. Most of the brands are honestly going to be very pragmatic about the platform they run — there is money if they do it right — but they are all in the business of making hardware at the moment, and there is a lot to be lost if they do it wrong.”

On the surface, it appears that Google TV’s best bet would be to provide a one-stop-shop connected-TV platform to smaller TV brands that haven’t already made a large investment in a proprietary solution.

“From the Google TV camp, it makes sense to want the big players to embrace and support their platform, but that is not what appears to be taking place right now,” said Pratt.

Morrod of IHS said the rollout of Google TV with major brands like Sony and LG “has more to do with associating top brands for quick mindshare penetration among consumers than with implementation barriers.”

Manufacturers have opted to add secondary lines of TVs based on the Google TV platform “to leverage the Google brand, which is very familiar to consumers, and also as a way to work on the development of Android applications for TV,” added DisplaySearch’s Gagnon. In the future, he said, “Google TV may be an ingredient in smart- TV platforms, or a stand-alone for some brands, but probably some combination thereof.”

LG’s new sets are based on an older version of Android that was code-named Honeycomb. Gagnon pointed out that one PC maker is already taking Google TV to the next step.

“Lenovo is launching a line of smart TVs in China using [Ice Cream Sandwich-based system linking the TV monitor with a handheld Android mobile device], kind of like a giant tablet,” he continued. “There is still debate about which approach to where the intelligence resides is best. Some propose the TV is the best location while others view the TV as a good monitor, and the system’s intelligence should reside in a device already found in the home like a set-top-box or a tablet.”

Eventually there will be many ways to watch “TV” and on many devices, said Quixel’s Pratt. “TVs themselves will probably always be the gateway to entertainment due in large part to their size,” she said.

Early results from a Quixel consumer study in development indicates the eventual winner of a smart-TV “platform war” will have to provide content mobility on mobile devices in a way that is both easy to use and understand, she added.

“Consumers have a variety of different devices and different platforms, and at the end of the day they want to watch what they want, when they want to,” said Pratt. “Connecting, using, downloading and streaming on all these different devices is still not easy and really just confusing and frustrating, even for many Apple product owners.”

The “A” word may be the biggest variable in the new connected-TV equation, and could be the biggest catalyst to adoption of the Google TV platform.

Morrod said he believes, initially, Apple will aim for 0.5 percent of the market (1 million or so sets) while taking 30 percent margin.

“The aim will be to reinvent the business model for TVs so that the hardware can cash in on the success of subscription pay-TV revenue and differentiate on services/UI/platform/integration.”


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