Google is developing a home entertainment system that streams music wirelessly throughout the home and would be marketed under the company’s own brand, according to the Wall Street Journal. One obvious implication is that Google now will enter the consumer electronics business in a more significant way.

The Google Nexus smart phone has been positioned as a bit of a “demonstration project,” to show what Android ideally can provide in a device experience. Google is more centrally involved as a backer of the Android mobile operating system. And, most recently, Google has acquired Motorola Mobility, which has put Google into the mobile handset business.
Many will worry about the potential implications for Google, which now will face at least some potential channel conflict with at least some potential licensees, though not in the mobile handset business.

The effort does put Google into the branded consumer electronics business in a new way. But in a broad sense, the move indicates the arguably growing degree of competition between Google and Apple. Apple has been masterful at using content to drive hardware sales, and future lines of business for both Google and Apple might overlap more centrally as hardware, software and revenue models built on content and transactions using hardware become more important. Apple, Google competition heating up

Some amount of such channel conflict might be unavoidable in the future, though. The phrase “coopetition” sums up the complicated relationships between ecosystem participants in new businesses that blend hardware, content, media, applications and transactions in new ways.

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