When Google first announced plans to buy Motorola last year, most pundits agreed that Google had no intention of actually owning Motorola, that it was just buying Motorola for the patents.
We, on the other hand, argued that Larry Page might be buying Motorola because he actually wanted to get into the gadget business–on account of the fact that Apple was producing much better smartphones and tablets than Google.
In the year or so since the deal was announced, it has become more and more clear that Larry does, in fact, want to make gadgets.
In the latest evidence of this, Google is now planning to open an online tablet store in which it will push Android-based tablets, Amir Efrati of the Wall Street Journal reports.
In this store, Google will initially sell tablets that are manufactured by its tablet hardware partners like Asus and Samsung. But the tablets may be co-branded as Google tablets.
And then, when the Motorola deal finally closes, Google’s tablet store will sell Google tablets.
Why is Google opening an Android tablet store?
Because sales of Android tablets have been horrible.
In the smartphone market, Google was able to partner with carriers to push Android-based smartphones. These distribution channels were effective, and Android quickly amassed the leading global market share (although in the U.S., Apple has been clawing back share and closing the gap).
The tablet distribution market, however, is completely different: Google and its hardware partners have to rely on retailers to sell the tablets. And if those retailers also sell Apple products, they have had to agree to give Apple products much more visibility and promotion. So Android tablets have largely been ignored by consumers.The one Android tablet that has been successful is Amazon’s Kindle Fire, but that tablet is “Android” in name only–Amazon has significantly modified and customised the platform to serve its own goals. And Amazon has sold a lot of Fires, in part because it owns the most powerful online distribution channel in the world.
Apple, meanwhile, now owns a global network of retail stores in addition to its online store and third-party retailing partners. So there’s huge distribution for the iPad.
Add all that together, and Android tablets (Kindle Fire excepted) have basically been dead on arrival.
So Google wants to fix that.
And the way it’s going to try to fix that is to open an online tablet store.
Google has been in the ecommerce business before, briefly, when it sold its Nexus One smartphone in a soon-to-be-aborted attempt to disrupt the wireless carrier control over the smartphone market. It sold about 100,000 Nexus Ones and then pulled the plug.
Photo: Daniel Goodman / Business Insider
A Google tablet store would presumably be a longer-term effort.Would it make much of a difference in the tablet market?
It would probably help. Especially if Google matches or beats the Kindle Fire pricing of $199.
To really make an impact in the tablet market, though, Google will likely have to either drastically undercut the iPad on price (which it would if its sells them for $199) or build tablets that are close to being as good as the iPad.
And, even then, it would be at a huge disadvantage relative to Apple, because of the power of the Apple stores as a distribution channel.
So if Google is really serious about competing against Apple, Google may well have to start building retail stores.
And it will have to build retail stores while also running its core business, search, and all of its other web-based business. And it will have to do that while also trying to kill Facebook in social and Microsoft in the enterprise. And while trying to build self-driving cars, building wind farms, and doing all the other things that Google does.
Google has its work cut out for it.
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