Now that the initial dust has settled over the audacious Google acquisition of Motorola, analyst eyes are turning deeper into the deal and beyond the obvious. More than just mobile phone patents, the Motorola acquisition puts Google squarely where it has wanted to be for a while - on the set top box. As IMS Research points out in a brief yesterday, Motorola has long been one of the top manufacturers of set-top boxes for many MSOs. They also have longstanding relationships with the very companies that otherwise see something like a Google TV as an intrusive layer on their own business models.
"With Google TV currently still in search of market traction, this deal allows Google to get closer to the video arena from the services side, versus the consumer side," says Paul Erickson, Senior Analyst, Consumer Electronics, IMS Research. "Also, it allows Google to have direct presence at the front line of the world's most competitive market for deploying pay-TV applications to tablet and handsets."
There is bound to be a number of messy pieces to the battle for TV-Web integration over the next few years. It is hard to believe that the major pay-TV providers are going to easily and willingly let Google TV become a default operating system across their boxes. Motorola is a strong player in that hardware arena, but they don't have that kind of leverage in a world where the MSO skunkworks have been working on proprietary digital TV interfaces for a long time. Worse, the battle for app dominance on the TV screen is going to have multiple combatants. With connected TV players like Samsung making inroads with their own direct connections to apps, you have a layer of TV makers wanting in on the Web-to-TV game. There is another generation of game boxes coming, the most popular way of connecting Web to TV. It is hard to believe that Sony and Microsoft will not be building into their next generation boxes robust app interfaces. And then there is Apple... and whatever the hell they are up to. One can imagine a number of years ahead of us where the TV environment starts looking a bit more like the mobile phone environment, a lot of hardware pieces and app sources and competing interfaces.
Google will certainly bring to the table a legacy of great analytics and the ad serving, ad sales models from the Web that could be extremely compelling in an IPTV future. But for consumers, the best hope is that competition among all of these gorillas will render clearer on screen interfaces and better integration among Web and TV and hardware pieces.The wild card in all of this - the real game changer - could well be the connection between the handset/tablet device and the set top box. The ways in which an iPhone or an Android device could be synched and integrated with the main screen makes the mind reel. The battle for the TV may end up being a real war over who controls the second screen.