Bloomberg News

Google Challenges Apple TV With $35 Video-Streaming Device (1)

July 24, 2013

Google Inc. (GOOG:US), owner of the world’s most popular search engine, introduced a device that sends YouTube and Netflix Inc. (NFLX:US) videos from phones, tablets and laptops to televisions, bolstering competition with Apple Inc. (AAPL:US)

Chromecast, a small $35 dongle that plugs into a TV’s HDMI input, lets customers watch and control online videos without their remote control. The gadget, unveiled at an event today in San Francisco, works with Android devices as well as Apple’s iPhone, and enables users to continue using their phone for other activities while streaming.

“Of course people would want to watch YouTube and Netflix on the device with the biggest screen, but the user experience on the TV has been so difficult,” said Rishi Chandra, a director of product management at the Mountain View, California-based company, in an interview after the event. “If you have to stop using your phone just to watch something on TV, it’s not a viable solution.”

The announcement of Chromecast came after Google introduced an updated Nexus 7 tablet, which has a sharper screen and is being made in partnership with Taiwan’s Asustek Computer Inc. (2357) In tablets, devices running Android software have been gaining share versus Apple’s iPad. The move into televisions follows previous unsuccessful efforts for Google, including a media-streaming device called Q that never shipped based on poor initial feedback, and the Google TV set-top box that has lagged the competition.

Google Senior Vice President Sundar Pichai said in an interview that the company would continue pushing Google TV, which turns TV into an Android device capable of playing apps and other content, “in a big way.”

Content Partners

Chromecast, which looks like a USB stick, wirelessly syncs video being watched on a customer’s mobile devices and TV. Pichai said the device will also work with Pandora Media Inc. (P:US)’s music-streaming service and other content partners in the future. It goes on sale today through Amazon.com Inc. (AMZN:US), Best Buy Co.’s website and the Google Play store. Google said that through a partnership with Netflix, Chromecast customers will get three free months of the streaming service.

Apple TV in its current iteration is a $99 set-top box, though Chief Executive Officer Tim Cook has said the company is considering other television products. Apple also has AirPlay, which lets consumers stream pictures and videos from iPhones and iPads to Apple TV.

Tablet Shipments

The upgraded Nexus 7 is Google’s latest effort to parlay its success in smartphones to larger devices. Tablet shipments, benefiting from consumer migration away from personal computers, are expected to grow 68 percent this year, outpacing a 4.3 percent increase for mobile phones, according to research firm Gartner Inc.

“Tablets are going to be part of the next era,” said Carolina Milanesi, an analyst with Gartner. “It means eyeballs and it means accounts and it means knowing what the consumers are doing.”

Google develops the Android operating system and offers it for free to makers of phones and tablets, as well as using the software in its own devices.

The Nexus 7 ranges in price from $229 for a Wi-Fi version to $349 for a device with more memory that also works over cellular networks. The new Nexus 7 is 50 grams lighter than its predecessor with the same screen size and a high resolution display, said Hugo Barra, vice president of Android product management.

“It’s a much more comfortable grip and fits easily into your purse or jacket pocket,” Barra said. For the screen, “having a crisp and bright display makes all the difference,” he said.

Upbeat Reviews

The Nexus, which sports a 7-inch screen, received positive reviews last year for its sleek design and intuitive software. The gadget offers the best value among its rivals, CNET said in a review last year.

“With its excellent design, useful software features, and low starting price, the Nexus 7 is the cheapest way to experience the best that the Android” operating system has to offer, CNET said. “The Nexus 7 is still the overall best small tablet.”

The Nexus 7 goes up against Apple’s iPad Mini, which is 7.9 inches, and Amazon’s Kindle Fire, which also has a 7-inch screen and uses a version of Android.

Google also announced today that it’s making textbook purchases and rentals available on the new tablet. Books from all five major publishers will be in Google’s store in time for the coming school year.

Google fell (GOOG:US) 0.1 percent to $902.90 at the close in New York. The stock has gained 28 percent this year, compared with a 17 percent drop in shares of Cupertino, California-based Apple.

To contact the reporters on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • GOOG
    (Google Inc)
    • $596.08 USD
    • 6.81
    • 1.14%
  • NFLX
    (Netflix Inc)
    • $457.52 USD
    • -1.49
    • -0.33%
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