The Wall Street Journal reported yesterday that Google is starting a store to sell Android tablets online. This is an attempt to jumpstart the sales of tablets running Google-approved versions of Android, which haven't been doing well at all in the U.S. The two most popular Android tablets in this country have been the Amazon Kindle Fire and Barnes & Noble Nook Tablet, which are outside the Google fold.
According to an NPD report from November, top Google-approved tablet vendor Samsung bumped along with only 192,000 Galaxy Tabs sold in the U.S. during the entire first 10 months of 2011. Compare that to analyst estimates of 5-6 million Kindle Fires sold in the fourth quarter of 2011 alone, or Apple's fourth-quarter sales of 15.4 million iPads.
A new store isn't going to solve the major problem with Android tablets, which is that they lack compelling tablet-focused apps from major, popular brands. But it's a good move, and it's very different from Google's first attempt at selling hardware online, the doomed Nexus One store. The reason: this time, wireless carriers aren't involved.
Why Tablets Aren't Like Phones
The Nexus store wasn't just a way to spread Android. As Google exec Erick Tseng told me at the time, it was an an attempt to remove the carriers from the phone sales process. Unfortunately, attacking the home turf of partners you need to launch your product doesn't work. Google's aggressive stance led to the cancellation of planned Verizon and Sprint models of the Nexus One. And with almost all U.S. mobile phones sold through carriers, Google was pushing a huge stone uphill with its independent store.
The tablet market is nothing like the phone market. It's much more like the PC market. Take a look at the iPad, the most popular tablet so far: given the choice between a carrier-shackled 3G model and the Wi-Fi-only iPad, the vast majority of buyers chose the Wi-Fi-only model. The Kindle Fire only comes 3G-free.
U.S. consumers aren't used to paying artificially depressed, subsidized prices for tablets, another reason independent phone stores have never been able to take off. Our mobile phone market is so dependent on subsidies that it's been impossible for a third party like Google to convince Americans to spend $529 for their smartphone. But $500 is widely considered a realistic price for a tablet.
How Google Could Make Tablets Cheaper
I'm encouraged by the idea that Google might subsidize these tablets itself, though. Unlike with Amazon's Kindle Fire subsidy (which the company hopes to make back in content sales) and carriers' phone subsidies (which they make back on service plans) this would be a pure market share play. Google would probably never get this money back, even though it might make a fraction of the subsidy back through advertising and content sales. The subsidy is purely to goose the sales of the platform (and to unseat Google's frenemy Amazon.)
As there aren't many Android tablets selling anyway, I can't see this store being anything but helpful. That said, it's not going to counter the power of brick-and-mortar Apple Stores selling iPads. That's because online stores lack a critical element: salespeople who convince shoppers to buy. I don't see Google opening a network of local, physical stores any time soon.
Google has a lot to gain, and almost nothing to lose, by selling Wi-Fi tablets through its own store. At best, it could raise the profile of Android tablets, spotlight winners in a crowded field and start a virtuous cycle that would encourage software developers to write good tablet apps. At worst, it'll be a bit of wasted effort. It's worth a try.
For more, see PCMag 10 Best Android Tablets slideshow below.
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