Google to Revive Music Service with Hardware

By Janet Maragioglio | Mon Feb 27, 2012 9:44 am

Google is counting on hardware to revive Google Music, hinting it will integrate the service into its own branded devices to compete against Apple.

The search giant's infant music service isn't performing to expectations, according to CNET's unnamed sources, with revenues and adoption rates falling far below the search giant's projections.

Google Music launched last November as an iTunes competitor, but a lack of licenses hinders its adoption and success.

Of the three major recording studios, Sony Music Entertainment and Universal participate in Google Music, and Warner Music Group does not.

Google, however, may get help in the form of new hardware capabilities, after completing its $12.5 billion buyout of Motorola. After integrating Google Music seamlessly with its own hardware line, the company may revive the service and push against Apple in the music and digital content market.

Apple, which packages iTunes with its mobile devices, offers an all-in-one strategy that drives adoption of a rich library of content, giving it a distinct market presence.

Google follows a different philosophy. The open-source Android OS runs on multiple, varied devices, often more suited to music playback than others.

Google is focusing efforts on integrating Android with services and features such as Google+ and mobile payment service Google Wallet. But the company lacks a singular device that seamlessly offers all its services on one platform.

The challenges for Google is to tap into the more than 700,000 daily Android activations to bolster Google Music adoption, a task Android fragmentation issues and a crowded, competitive market for digital music and content make difficult.

Google is likely holding off on a big Google Music push, until it has hardware designed to accommodate it. The company is working on a home entertainment device that will allow users to stream music throughout their homes.

Google employees are testing the device, and once it arrives on the market, it may be the right match for Google Music integration, since the service streams music from the cloud, rather than downloading to a device's memory.

As Google's move into hardware gains momentum with finalization of its Motorola deal, Google Music may gain more momentum in the music industry and come out of the shadows to compete more successfully against iTunes.

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