IHS technology said earlier this week that it expects Android TV to shake up the market for media players dominated by Apple and Roku. However, the opportunity for Android TV in both media players and smart TVs seems to be fading.
IHS forecasts a bright future for the media player market. The company expects the installed base to reach 50 million units by the end of this year, with 24 million units in the US alone. By 2017, the company forecasts the US installed base will reach 44 million. Paul Erickson, senior analyst for the connected home at IHS, believes this growth provides a significant opportunity for Android TV. He feels the close co-operation between Android devices in an ecosystem could be a significant advantage.
Initially, I also thought there was a great opportunity for Android TV to be disruptive in the market. However, the market is changing quickly and the advantages conferred by strong ecosystems are starting to erode.
The challenges that lie ahead for Android TV are considerable. The company faces stiff, entrenched competition in every area of the market. Major CE manufacturers are now acutely aware of the pluses and minuses of working with Google’s android operating system. This was not the case when vendors such as LG and Samsung decided to use Android in their smartphones.
Take the smart TV market for example. Google has lined up Sony, Sharp and TP Vision as partners to use android TV as their smart TV platform. We should see the first sets arrive in 2015. However, without the major market muscle of players like LG and Samsung, it will take many years for there to be a large number of Android TV powered sets in the market. And Google doesn’t even have a lock on the smaller CE TV manufacturers. The first Roku-powered sets from TCL and Hisense will arrive this year, for the 2014 shopping season.
It’s hard to imagine any ecosystem play, particularly one from Google, unsettling Apple’s dominance in its segment. Which is why IHS identifies Roku as the company most at risk from Android TV. However, the lack of an ecosystem seems to be less and less of a disadvantage for Roku. The emergence of mobile-to-TV control protocols such as DIAL and LG’s Connect SDK mean smartphone apps can easily reach the television via smart TVs and media players from a variety of manufacturers. This blunts the impact of a tight device ecosystem.
Finally, the biggest competition for Android TV is from Google itself; Chromecast. Though there are things that Google cannot do with the streaming stick approach, $35 is tough to beat. Apps are slowly starting to arrive for the device, and it is selling extremely well. It is also already integrated with the Google ecosystem.
With dominance in smart TVs a distant dream and the leverage to disrupt the media player market fading daily, Android TV may just be too late to make any impression at all.
Why it matters
IHS Technology thinks there’s a great opportunity for Android TV to be disruptive in the media player market.
The opportunity for Google to create a tight ecosystem between mobile and TV makes Roku vulnerable, according to IHS.
The emergence of smartphone-to-TV multi-vendor protocols erode the power of the ecosystem.