It's just over a year old, but Android TV has yet to find much success.
The smart TV platform, launched last year by Alphabet's Google (NASDAQ:GOOG) (NASDAQ:GOOGL), is the search giant's alternative to the Roku, Amazon's (NASDAQ:AMZN) Fire TV, and Apple (NASDAQ:AAPL) TV. But it hasn't made a dent in terms of market share, and its support has been rather lackluster. As Google's competition ramps up, Android TV could be left behind.
A new Chromecast, but no new Nexus Player
Google is unique among the many tech giants vying for living room supremacy -- it's the only firm actively supporting two distinct smart TV platforms. In addition to Android TV, it also offers Chromecast, the streaming dongle that lets owners beam content to their TV using a paired smartphone, tablet, or PC. Chromecast is inexpensive, and it's proven to be quite popular, but it's not a true set-top alternative, as it lacks a dedicated interface and remote control.
Late last month at a special hardware event, Google announced two new Chromecasts, but did not unveil any new Android TV hardware, putting the platform into a strange predicament this holiday shopping season.
Consumers looking for a set-top box this fall will have many options to choose from, including the recently announced Roku 4, upcoming Apple TV refresh, and the new 4K Fire TV. Google's own Android TV-powered Nexus Player is nearly a year old and doesn't stack up well with these devices.
Graphics card maker NVIDIA launched the Android TV-powered Shield TV this past summer. It's every bit as powerful as its competitors, but it's more expensive. Starting at $199 (and going up to as much as $349) it's more of a video game console-alternative than a streaming set-top box. NVIDIA has used the new Apple TV to highlight its offering, but has yet to disclose just how many units it's actually sold.
An entirely different strategy
Instead, Google appears to be pursuing a different strategy with Android TV. Rather than convince consumers to purchase a dedicated set-top box like Roku, Amazon, or Apple, Google is working to bring Android TV directly to televisions and cable boxes.
Sharp, Sony, TCL, HiSense, and Philips have all signed on to Google's platform. If you purchase a new Sony Bravia TV, there's a good chance it will be powered by Google's operating system. Japan's KDDI and Italy's Telecom Italia have also pledged to use Android TV to power their cable boxes.
Of course, that doesn't cover everyone. Samsung and LG are the market leaders where it comes to TV shipments, and both are currently wed to their own rival smart TV platforms (Tizen for Samsung, webOS for LG). Vizio, a rising star, is also notably absent. Two paid-TV operators is a start, but there are dozens in the U.S. alone.
If Google can make Android TV ubiquitous, consumers may struggle with the prospect of spending money on a dedicated set-top box. If your TV has Android TV built in, why spend an additional $149 on an Apple TV?
But TV replacement cycles are long -- around 6 to 10 years on average. Even if Google manages to win over the bulk of TV manufacturers, it will take years to build a substantial base, leaving ample time for Apple and Amazon to construct compelling ecosystems.
Google isn't giving up on Android TV, but is pursuing a different strategy than its rivals -- a strategy that doesn't necessitate new hardware.
Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon.com, and Apple. The Motley Fool recommends Nvidia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.