This week Google had its big I/O conference where it announced many of the new products it has coming out in the next few months. Two of the big surprises of the conference were the Nexus 7 ( a 7 inch tablet) and the Nexus Q ( a cloud powered television media system). Most puzzling is that these products don’t particularly add anything to the Google’s core competency which is selling advertising but digging deeper you’ll see that this is part of a larger play to stay in the game against two other big rivals.
Android, IOS and soon Windows 8. What do they all have in common? Initially they were all platforms (or in Microsoft’s case based off a platform) for mobile phones that have since expanded into tablets and now television set top boxes. All three firms are making pretty heavy investments into products that most likely do not have high profit margins. But in addition to this, products along all three of these company sets will be connected to a central content system where users can buy apps, video, audio and image (books/magazines) based content.
Ah ha! So essentially what the plan for these three is owning the media distribution system and making profit off of any royalties generated from the sale of media content. Where previously the war was over which computer operating system a person used or their search engine now the fight is over where they consume their content from. With content moving away from traditional sources such as cable providers, book stores and news-stands, being able to own an ecosystem that allows people to purchase media where ever they are is a big move with potential for a lot of profit.
Where will things go from here? So far Apple has the strongest foothold with iTunes entrenched as the first to launch. Can Microsoft and Google catch up being later into the game? Absolutely! Microsoft has the advantage of being a leader in the console gaming market which places them in a strong competitive position to Apple TV. As for Google, they are currently # 2 in the smartphone market using an open system where as long as it’s an Android powered device it will work with Google’s content distribution systems. The big marketing move for all these players will be to get consumers to purchase into their whole line of products making them the primary content provider.
It will definitely be interesting to see where things go for these three firms and how competitive factors will come into play. Will cable providers and the big studios choose sides like in the fight for Blu-Ray vs. HD-DVD? Or will they move to limit things all together? What will happen to single device manufacturing firms such as RIM ? With the technology industry moving so fast the next year or two will be ones to watch to see where the cards land.