Despite failing in the smartphone market, Google is looking to enter the hardware business once again with a tablet  powered by its own Android operating system. Google appears to be aiming square between the eyes of the market-dominant Apple iPad.
The Wall Street Journal cites "people familiar with the matter" revealing that Google will sell co-branded tablets directly to consumers through online stores like Amazon.com. Google reportedly hopes to boost sales of Android-based tablets.
Google's tablet move could be a tie-in with its $12.5 billion Motorola acquisition. Federal regulators in both the U.S. and Europe have already approved the merger. Google now waits on China. Motorola tablets could be among the first fruits of the deal.
Apple's Hard Lesson
We spoke with Rob Enderle, principal analyst at the Enderle Group, to get his thoughts on the rumors. In short, he believes it's a bad idea.
"It seems like Google is doing everything they possibly can to piss off their Android licensees," said Rob Enderle, principal analyst at the Enderle Group. "The Nexus phone upset them, and coming out with a Google tablet, even if it's marginally successful, will kill the ecosystem because nobody wants to license from a company that they are competing with."
Enderle said market history proves that competing with licensees doesn't work. Either the licensor dominates the market or the licensee overtakes the licensor. Apple found this out the hard way when then-CEO Gil Amelio decided to license the Mac operating system. Apple's licensees proved much more successful than Apple and the company brought Steve Jobs back to fix the mess.
"The rule of thumb is you never license from a company you are competing with because there's no way you can win," Enderle said. "Companies that license the technology are always going to have the advantage and, if they don't, they will turn off the spigot."
Google's Opportunity
Google could not immediately be reached for comment. Google declined to comment to The Wall Street Journal. But Google seems ready to do something to challenge Apple where tablet makers like Samsung, Research In Motion, Hewlett-Packard and Dell have failed.
Google likely also smells opportunity.
According to IDC's March data , worldwide tablet shipments rose by 56 percent in the fourth quarter of 2011. More than 28 million tablets shipped. That marks a 155 percent increase from the fourth quarter of 2010. IDC has increased its 2012 tablet forecast to 106.1 million units, up from its previous forecast of 87.7 million units.
Apple Continues Growth Despite Competitors
Despite an impressive debut by Amazon, which shipped 4.7 million Kindle Fires into the market, IDC reports Apple continued to see strong growth in the quarter, shipping 15.4 million units in fourth quarter of 2011. That's up from 11.1 million units in the third quarter and a 54.7 percent worldwide market share. Amazon is in second place with 16.8 percent market share, according to IDC.
"Amazon's widely reported entry into the media tablet market with a $199, 7-inch product seemed to raise consumers' awareness of the category worldwide despite the fact that the Fire shipped almost exclusively in the U.S. in the fourth quarter," said Tom Mainelli, research director for mobile connected devices at IDC.
"As a result, products across the pricing spectrum sold well, including everything from Apple's premium-priced iPads -- which start at $499 -- to Pandigital's line of Android-based, entry-level tablets -- which start at $120."
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 Recommended Reading: Search & Destroy: Why You Can't Trust Google Inc. Synopsis: This is the other side of the Google story. In Search & Destroy, Google expert Scott Cleland, shows that the world's most powerful company is not who it pretends to be.
Google pretends to be a harmless lamb, but chose a full-size model of a Tyrannosaurus Rex as its mascot. Beware the T-Rex in sheep's clothing.
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Posted: 2012-03-31 @ 3:02am PT
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