Forget a Google phone - Google needs a tablet

OK, so the Nexus One was a commercial failure. It was an idea that was before its time here in North America (where, unlike in Europe, the idea of buying an unlocked, unsubsidized phone went over like a lead balloon), lacked support for the right carriers, and was dismally short on customer service in true Google fashion. Whatever. A Google tablet, on the other hand is a no-brainer that, for many obscure reasons, we'll probably never see.

Citigroup, FBR Capital Markets and Gartner all recently released tablet sales predictions for 2011. As reported by AppleInsider,

...reports from each differ widely on the number of tablets that will be sold next year, but all agree Apple will lead the pack...Craig Berger of FBR Capital Markets says Apple will sell 40 million iPads next year, and that other makers will mange to sell another 30 million. He indicates that every 2.5 tablets sold will result in a lost PC sale, or a total of 28 million fewer conventional PCs.

So why does Google need to get in on this market? And why is it different from the phone market in which they performed so poorly? And why will they probably take a pass?

Because tablets are ideally suited for content consumption. Reading, surfing, watching, liking, sharing, you name it. And Google does few things better than index and/or aggregate content for consumption, at the same time selling highly profitable ads around that content. A Google tablet, optimized for access to all of Google's services and leveraging slick (but underutilized) tools like Fast Flip would get the company into the multi-million unit game from which they've largely been excluded (and give them access to a mobile advertising platform that current Android smartphones can't match).

Unlike with smartphones, North American consumers don't expect subsidies on their tablets. They expect them to be priced reasonably, but not necessarily cheaply, in line with an inexpensive computer. Apple has primed them nicely for that. Google also now has solid relationships with all major carriers, meaning that if they went the 3G route, they wouldn't be locked in to partnerships with less-than-ubiquitous phone companies (although a strictly WiFi device would probably see significant success without the phone company hassles or costs).

Google also has powerful content channels that could lend themselves to a tablet form factor, where the Nexus One, as an early adopter device, was much more about the new Android operating system. Google TV (including Netflix), Books, Reader, Picasa, Maps, Docs, and Video, as well as YouTube all would play very well with consumers, especially those who didn't want to be locked in to Apple's iTunes content ecosystem or wanted Flash to work on their tablets. Support is even less of an issue than it is with a phone, particularly if Google were to go with a WiFi-only approach.

Now is the time, all right (or at least when the tablet-optimized Android 2.3 is released widely early in 2011). But, unfortunately, I don't see it happening. There are many reasons, but all lead to one result: the iPad domination of this market that the industry analysts have predicted.

While a Google Tablet would be a device behind which developers could throw their muscle and support and could be a powerful flagship for Android as a tablet OS, it would also put a damper on growing manufacturer support for the OS. If Google were to produce an aggressively priced, high-volume, fully optimized Android tablet, would Dell or Acer have any real incentive to produce innovative Android tablets of their own? How would this really play with the Android-openness message that Google espouses to anyone who will listen?

As they are with smartphones, Google (and Android) will ultimately begin to dominate the tablet market through sheer volume generated by many device manufactures, mobile carriers, and distribution channels. It will take time (as it did with smartphones) and will lead to yet another fragmented Android platform (it's fragmented on smartphones and Google TV already), but it will happen.

I can't help but wonder, though, if this isn't one case where at least a reference design and more likely a Google-branded tablet might not be a better strategy for consumers, the company, and the platform. Time will tell, but the utter absence of any serious iPad competitors as we turn the corner into 2011 means that this coming year will be the year of the iPad, even if Android continues its explosive growth in the smartphone market.