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Google working on an 'entertainment device'

Google working on an 'entertainment device'

By David Streitfield & Nicole Perloth, New York Times | Updated: 5 June 2012 18:40 IST

Highlights

Google is developing a home entertainment device, according to people with knowledge of the company's plans, in a move that would bring it more broadly into consumer electronics.

Google is developing a home entertainment device, according to people with knowledge of the company's plans, in a move that would bring it more broadly into consumer electronics.

The device, which exists as a prototype and will eventually be sold as a branded item to consumers, is the company's most significant venture into hardware. While the initial purpose of the device will be for streaming music, the eventual use could be much wider.

As the Internet matures, the leading companies are trying to create full-fledged ecosystems to preserve their individual dominance. Amazon, which began as a retailer, now makes reading devices. Apple, which originally produced only hardware, now sells content.

Google still makes the vast majority of its money from Internet search. But as computing detaches from the desktop and laptop, the company cannot afford to be marginalized. The new device is an effort to control the design, production and sale of an entertainment device, just as its competitors have done so successfully.

Larry Page, who last year took the reins of the company he co-founded, has been intent on moving into hardware. The entertainment device has been in the works for more than a year, before Google made a $12.5 billion deal to buy the handset maker Motorola Mobility, the most likely manufacturer of the device. That acquisition is likely to close next week.

Owning Motorola - whose origins lie in a company that made an earlier generation of home entertainment systems before stumbling - will put Google into direct competition with the phone makers that use its Android software as well as Apple and its iPhone.

A Google spokesman declined to comment.

While Google has talked openly about its designs on consumers' living rooms, news that the device was becoming a reality surfaced last week in an application the search giant filed with the Federal Communications Commission. In the application, Google said it would begin testing a device it labeled simply an "entertainment device."

The device will have Bluetooth and Wi-Fi and, as Google noted in the application, it will "connect to other home electronics equipment." The application, which was first reported by the tech Web site GigaOM, said Google would test the device for stability in employees' homes through the summer.

Analysts are wary of Google's venture into the notoriously cutthroat hardware field. Apple has loyal, sometimes fanatical followers, and enviably rich profit margins. Amazon is willing to lose money on its devices and make it up on sales of content. Most other hardware makers have a much tougher slog.

But Google is seen as having little choice.

"Google's future depends on extending its influence beyond the PC screen," said James McQuivey, a Forrester analyst. "They've made tremendous progress in the mobile phone business, but their attempts to do the same thing with the TV and tablet flopped because the hardware manufacturers they relied on were not able to move fast enough."

But Mr. McQuivey noted that controlling manufacturing meant calling the shots. "It's quite telling that Amazon introduced its tablet two months ago and is already the second tablet maker in the market," he said.

Last November, Google introduced its own streaming music service to compete with Apple and Amazon in the wars for digital media. The service lets users access music from various Internet connected devices. By manufacturing its own device, Google can tether those listeners back to its own product.

Google's larger goal, a person closely tied to the project said, was to connect everything in the home to the Internet, including light bulbs, speakers and TV sets. Google unveiled a "conceptual" version of a multi-purpose device last year at a developer conference.

The perils of not having full control of the design and manufacturing of a device became apparent with Google TV, which was codeveloped in 2010 by Google, Sony, Intel and Logitech. Reviewers hated it and the public scorned it. Guerrino De Luca, chief executive of Logitech has acknowledged publicly that the Google TV was "a mistake of implementation of a gigantic nature."

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