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Rise of Google's Consumer Electronics Ecosystem


Smart set-top boxes that are used for streaming online video often garner less attention than other connected consumer electronics (CE) devices like TVs and game consoles.

Apple has referred to its Apple TV device as a hobby -- although it apparently leads the market with around 4 million units shipped through 2011. Roku has also had some success -- passing 2.5M units in 2011.

But according to the latest market study by ABI Research, the future outlook is challenging for these dedicated streaming devices, as they attempt to break out of a niche market status.

TV sets, game consoles, Blu-ray players, and even mobile devices are quickly conspiring to engender a very competitive market for the digital living room. Even so, streaming digital media set-top box shipments are expected to reach as high as 57 million by 2017.

"Google has a split personality in this market," according to Sam Rosen, practice director of TV & video at ABI Research. On the one hand, China, in particular, is seeing growing interest in generic Android based set-top boxes and USB (or MHL) dongles or stick-like devices.

On the other hand, it is launching its second generation of Google TV platforms -- including the well-priced and impressively equipped Vizio Co-Star -- where it tries to bring more content relationships and a better overall Android ecosystem.

The smaller form factor USB and MHL devices are both portable and like the Android set-top boxes, offer consumers similar services and features found on popular mobile devices.

Both of these devices expand the potential of the Google Play content ecosystem, but also could work well as a companion device for Android based mobile devices -- not unlike the upcoming Nexus Q, only at a more appealing price point and with better features.

ABI says that dedicated devices have traditionally had a slow growth pattern in the market, often lacking the same value proposition as more full-featured products -- such as video game consoles.

The changing consumer landscape, however, could present a window of opportunity for smart set-top boxes as more consumers allocate entertainment budget, both monetary and time, to streaming digital media.

The future of connected CE will ultimately work together with mobile devices and not against them. Other CE devices, like connected TVs and game consoles, are already integrating mobile devices into the adaptive user experience.

The same will likely prove true for smart set-top boxes as well. ABI believes that if the vertically integrated Android boxes gain popularity, then this could create a stronger ecosystem for Google -- essentially becoming a very direct and compelling challenger to Apple.

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