With New Music Hardware, Google Takes Aim at Your Living Room

Matthew Shaer, Christian Science Monitor
Monday, 13 Feb 2012 | 10:10 AM ET
A sign is displayed outside of the Google headquarters in Mountain View, California.
Getty Images
A sign is displayed outside of the Google headquarters in Mountain View, California.

Earlier this month, Piper Jaffray analyst Gene Munster forecasted the imminent arrival of an Apple TV set, possibly as soon as the fourth quarter of 2012. In Munster's rendering, the Apple TV would stream a range of live and digital content, and sync with other Apple platforms, such as iCloud. Now comes word that Google, Apple's Silicon Valley rival, is considering its own "home entertainment device."

According to The New York Times, Google is at work on a "branded item," which will mark "the company’s most significant venture into hardware." (Google, of course, already sells branded phones, such as the Galaxy Nexus.) Crucially, unlike Apple TV , this gadget – let's call it the Google Entertainment Gizmo.

So why would Google, which makes plenty of cash on advertising sales, want to expand into the hardware market? Well, over at PC World, Daniel Ionescu has a couple ideas.

"Apple has shown that by controlling the hardware and software, it can deliver better-integrated products and make high profits not only from content sales, but also from hardware," Ionescu writes. "Google gives Android away for free to phone manufacturers, but if it controls the hardware, it could command higher profits. So far, Google’s main revenue source remains search advertising."

Moreover, Google may simply have no choice. As Forrester analyst James McQuivey told the Times this week, "Google’s future depends on extending its influence beyond the PC screen." McQuivey points out that Google has experienced some success with its line of mobile phones, which have received rapturous marks from critics, although it has had more trouble with its Google TV project.

At any rate, any Google stereo would likely sync with Google Music, an online store and music-sharing platform introduced last November. Google Music launched with 13 million tracks from a handful of labels, including majors such as EMI, Sony, and Universal, and an estimated 1,000 indie houses. Google Music is a ready-made trove of content for the Google Entertainment Gizmo.

Or whatever it's going to be called.

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