Apple, Google Shoot It Out on the Small Screen

With Apple TV and Google TV, the companies' latest skirmish is taking place in the living room, but they're bringing very different services and ambitions to the television.

Google CEO Eric Schmidt showed off Google TV at the IFA conference in Germany this week, which followed fast on the heels of Apple CEO Steve Jobs unveiling the new $99 Apple TV last week.

Looks like another skirmish has broken out between the Silicon Valley behemoths, only this time it's taking place in the living room. But the truth is that Apple and Google won't be going head-to-head, rather they're bringing very different services and ambitions to the television viewing experience.

Google's plan is to unite Internet search and content with premium television content under a single user interface. This will enable a consumer to, say, search for actors, movie titles or television series and receive and watch video results all from the TV.

Google TV, however, is an ambitious plan with little chance of success, says Gartner analyst Van Baker. "For them to achieve their vision, they have to convince people like Comcast, DirecTV or even AT&T to give up their user interface on their set-top boxes to Google and let Google integrate their content with the Google interface and Internet access services," he says. "I don't see that happening."

Baker figures the best Google can hope for is to deliver a side-by-side experience -basically, another remote control for the coffee table to access YouTube and other Internet content. With such a limited service, will consumers want Google TV? "People have been able to get a browser on their television sets for years," Baker says, "yet few people bought it."

Public opinion seems to be on the side of Apple's Jobs, who said last week that consumers "go to their widescreen TVs for entertainment, not to have another computer. This is a hard one for people in the computer industry to understand, but it's really easy for consumers to understand."

While Google vies for the whole pie, Apple has chosen to go after a small slice with its next-gen Apple TV. Literally a quarter of the size of its predecessor, the new Apple TV costs $99 and lacks an internal hard drive. Its sole purpose is to stream movies and television programs rented from iTunes or Netflix, as well as YouTube videos, to a television set.

Apple's well-established ties in the movie business, along with Apple TV's inability to store content thus reducing the piracy threat, resonates with content producers. On the television program front, Apple still has a ways to go because Apple TV only has a couple of networks on board.

Apple TV's tempered approach and low price point should help Apple increase market share in the living room, as opposed to Google TV's lofty goals. But Apple's goals also mean people will still be waiting for the cable guy or satellite dish repairman.

"Is Apple TV's improved value proposition going to take it from a hobby to a mainstream product? Absolutely not," says Baker. "Apple TV is not going to displace cable operators anytime soon."