Google's Chromecast challenge

Google's Chromecast device is a direct threat to digital media receivers such as Roku and the slew of HDMI Android stick manufacturers, but the move should also be of concern to content providers and broadcasters.

Google has outlined its latest assault on the TV space with its new Chromecast TV streaming device. This marks Google’s third attempt at bringing the living room into the Google sphere of influence, and this time its focus is on cost and cloud services. The device provides a most direct threat to digital media receivers such as Roku and the slew of HDMI Android stick manufacturers, but the move will also be of concern to content providers and broadcasters as the device will help to break down the barriers between the PC and the TV. Additionally, Google has announced a refresh of its Nexus 7 tablet and the latest version of its mobile OS, Android 4.3.

Chromecast offers internet TV at a knock-down price

Chromecast is a small HDMI dongle that allows Internet media services, such as YouTube, Nextflix, and Google Play, to be streamed to a TV. The device can be controlled by a range of devices (including Android, iOS, Windows, OS X, and Chrome OS), but unlike Apple TV the content is streamed directly from the internet rather than from the device itself. In addition, users will be able to send websites viewed in the Chrome browser onto their TV, a feature which uses the emergent WebRTC streaming protocol.

A key selling point of the device is its price, which at $US35 significantly undercuts Google’s previous TV products (the Google TV platform and the Nexus Q streaming device), as well as Apple TV and Roku player. As an added incentive Google is currently offering three months of free access to Netflix to accompany the device. The Chromecast is Google’s best shot yet at cracking the mainstream connected TV market, a challenge that it and others have so far failed to accomplish. While the price is certainly right, the challenge for Google is to work out how to successfully market the device outside a small group of early adopters. If Google does manage to get the formula right, this would be hugely significant for the company, giving it a proper foothold in TV and a step closer to the colossal advertising budgets which accompany it.

With Chromecast’s reliance on internet streaming, combined with support for cross-platform compatibility, Google is sending a clear signal that it sees the device as virtually irrelevant and that cloud services are the key enabler for multi-screen access. This view is the exact opposite of Apple’s strategy of tying its multi-screen offering to its own specific devices, and thus further underscores the fundamental difference between the two companies.

Updated Nexus 7 offers higher resolution at a cost

Google used the same press event to announce an update to its Nexus 7 tablet, which was launched last year. The device features a handful of tweaks, the most significant of which is the addition of an HD screen, which will place pressure on Apple’s iPad Mini, which only offers around half of the screen resolution. The device also benefits from a faster processor and GPU, more memory, an increase in storage, and an option for LTE. The new device will ship with the latest version of Android 4.3, and will be priced at $US30 more than the old model, at $US229.

While Google has not revealed how well its previous Nexus 7 device sold, it did use the event to announce that Android tablet activations have risen from 10 million last year to 70 million today, and claimed that in Japan Android tablets are outselling their Apple rivals.

Android 4.3 offers a modest update and minor tweaks

The latest version of Google’s mobile software platform, Android 4.3, confusingly shares the same “Jelly Bean” codename as its predecessor, Android 4.2. Given the relatively minor update to the software platform, this decision is perhaps understandable and reflects the relative maturity of the platform.

The main improvements include native support for Bluetooth 4.0 (also known as Bluetooth Smart and Bluetooth Low Energy), support for the OpenGL ES 3.0 graphics standard, the ability to create restricted user profiles, and new media and security features. In addition to shipping on the new Nexus 7 tablet, Android 4.3 is already available for most of Google’s other Nexus devices, although availability on other Android devices will be dependent on the individual vendors.

Nick Dillon is senior analyst specialising in devices and platforms at Ovum.