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Google is getting back into the consumer goods market with an online store and a co-branded tablet, according to a story in the Wall Street Journal. On Thursday evening the Journal said that the search engine would try directly targeting the consumer market again, this time with tablets. Since consumers tend to buy tablets without a carrier contract, this time Google’s direct-to-consumer strategy might work.
The Internet search company is planning to market and sell tablets directly to consumers through an online store, similar to rivals Apple and Amazon.com Inc., according to people familiar with the matter. The move is an effort to turn around sluggish sales of tablet computers powered by Google’s Android software.
Some of the online store’s future tablets are expected to be co-branded with Google’s name, said people familiar with the matter. Google won’t make the devices and its existing partners such as Samsung Electronics Co. and ASUSTeK Computer Inc. will be responsible for the hardware. One Android tablet that may be sold in the online store is due to be released later this year by Taiwan-based Asus, said one of these people.
This isn’t a totally foreign rumor to hit the media in the last few weeks, although the online store strategy is new.
While it’s true that Google’s Android OS isn’t making huge dents in the tablet market compared with Apple’s iPad, it’s not clear if the issue is the retail strategy associated with it. The Android tablet market has been beset by glitchy hardware and slow upgrades to tablet-capable versions of Android. By making a co-branded tablet with hardware companies, Google may be able to help set the tone and experience for Android on a tablet, something it did really well with the Nexus phone.
Unlike Apple, which controls its ecosystem, Google leaves nearly everything to partners, which can lead to a disjointed or fragmented user experience that can tarnish the entire Android brand. In fact, in many ways the Nexus program, while not a great seller, has shown hardware makers, consumers and developers what the Android OS can do.
Plus, the tablet market is different than the handset markets, as for the most part carriers aren’t involved in the consumer’s purchase. In fact, as Kevin Tofel recently reported nine out of 10 tablet buyers don’t go through their carrier, which means that Google might be a viable seller. When Google shut down its Nexus store back in May 2010, Kevin pointed out that much of the failure was associated with the lack of subsidized handsets and the customers being willing to purchase a handset sight unseen. Google also didn’t spend money or time marketing the store.
The subsidy isn’t an issue with tablets, and Amazon has proven that people will buy the Kindle tablet online. So perhaps if Google puts some marketing muscle behind its new store this time the ending will be different.