According to a number of media reports, Google Inc. (NASDAQ: GOOG) will release a set-top box. Presumably the product is meant to allow it to compete with new generation products from Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL). However, the market is much more crowded than that, and Google’s chance of taking market share from incumbents is low.
According to The Wall Street Journal:
Google’s device will carry another company’s brand, but will be powered by Google’s new Android TV software designed to play movies, games and other content on televisions, the people said. Users will be able to control the box using Android smartphones or tablets, and potentially other devices.
Since Android has taken over the smartphone market, Google might assume it can do as well in the home entertainment market.
A typical American living room is filled with devices connected to the TV screen. Most of these are from cable and satellite companies, which bring hundreds of channels to tens of millions of homes, and they have held their places on the tops of TVs for decades. The firms have set up on-demand devices with libraries of countless films. They are, at least, modest competitors to products from Apple and Google. And they are entrenched.
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Telecom companies, primarily Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), have displaced some of the cable and satellite delivery with fiber to the home products that are also carriers for broadband. The two telecoms are also in the race to bring on-demand premium content, making them one of an increasing number of companies with partnerships with Hollywood.
If the market is not crowded enough, Microsoft Corp. (NASDAQ: MSFT) offers its Xbox One as a home entertainment delivery system, as does rival Sony Corp. (NYSE: SNE) via its PlayStation 4. Internet providers deliver video, games and broadband to the TV alternative — the PC screen. And Blue Ray DVD players are enough for many Americans who want to rent or own content delivered in a physical form.
Google’s new set-top device may offer everything its competition does, along with particularly strong interactivity with programs brought via Android. That will not be nearly enough to help it elbow into a market filled to the bursting point.
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