Google Planning To Sell Tablets Straight To Consumers

Here we go again: the rumors of Google branching out into the tablet space have been floating around for what seems like ages now, and the Wall Street Journal has jumped into the fray. They cite the usual handful of unnamed sources, who this time say that Google is planning to open up their own online store à la Amazon to sell Android tablets.

Not just any Android tablets, mind you — co-branded ones that bear Google’s name along with that of the manufacturer. Google does many things (some better than others), but they’re definitely not in the consumer hardware production game. Instead, Google is said to be working with hardware experts at Asus and Samsung (and presumably Motorola at some point), and is also considering the possibility of subsidizing the tablet’s price to fall in line with devices like Amazon’s Kindle Fire.

If these whispers hold true, then Google could be onto something. That theoretical store could already have a flagship if the oft-rumored $199 Nexus Tablet actually materializes, and the package only gets sweeter if it ends up running Jelly Bean, which the WSJ reports will hit in mid-2012. To date, the only Android tablet to give the iPad a run for its money is the Fire, but if Google can get close in price while beating them out on specs, Amazon could be in trouble. The formula may not exactly prove to be an iPad killer, but a strong second place in the tablet race is nothing to sneeze at.

What gets me though is how Google is reportedly thinking of selling these things. Google has toyed with this sort of online retail model before — the Nexus One was sold unsubsidized by Google, even though T-Mobile provided the network for it. By the time Google’s next Nexus made the rounds though, the search giant wised up and tapped Best Buy to help put the Nexus S into people’s hungry hands. Getting those tablets out into meatspace could do wonders for visibility, and brick and mortar retail certainly has a sense of immediacy about it — there’s little delay between seeing something you want and owning it.

Still, the direct-to-consumer approach has its advantages. By cutting out the retail middleman, Google gets to retain that much more control over the situation (not to mention the revenue they don’t have to share with stores). The Nexus One seems like a dicey precedent, but people who shied away from it didn’t do so because it was a bad phone, they did so because it was $529.99 without a contract. With potentially aggressively priced tablets and a decent payments system in tow, Google should be able to lock up this new revenue stream pretty tightly. That is, of course, if they can keep on top of demand for a cheap, Google-approved tablet.

BlackBerry maker RIM abandons battle with iPhone and Android

Research In Motion has conceded its BlackBerry smartphones cannot compete with iPhone and Android in the consumer markets. Photograph: Scott Olson/Getty

The BlackBerry maker, Research in Motion, is to pull back from trying to compete with Apple’s iPhone and the Android mobile platform and instead return to its original focus on business users.

The shift in strategy came with a management shakeup that includes longtime executive Jim Balsillie leaving the board and severing ties with a company he helped build.

RIM said it will focus its consumer efforts on targeted offerings that tap the company’s strengths. That included devices that employees would want to buy on their own and bring to the corporate environment. The company was exploring partnerships and other opportunities for consumer products that were not deemed central. Those products could include software and features that were then incorporated into RIM’s own offerings.

“We can’t do everything ourselves but we can do what we’re good at,” said RIM chief executive Thorsten Heins.

RIM has had limited success trying to enter consumer markets in recent years, particularly with high-end devices that have the touchscreens popular with consumers.

Heins said a turnaround required “substantial change”.

“We believe that BlackBerry cannot succeed if we tried to be everybody’s darling and all things to all people,” Heins said. “Therefore we plan to build on our strength.”

Heins, who joined RIM four years ago and was most recently its chief operating officer, replaced co-CEOs Balsillie and Mike Lazaridis in January after the company lost tens of billions in market value. Lazaridis founded the company and Balsillie joined in its early years.

RIM said on Thursday that Balsillie has resigned from its board after 20 years with the company. David Yach, chief technology officer for software, and Jim Rowan, chief operating officer for global operations, are also leaving.

The company said it was undergoing a comprehensive strategic review. Heins said he was open to selling the company, but “it is not the main direction we are pursuing right now”.

The Canadian company has long dominated the corporate smartphone market. Its BlackBerrys are known for their security and reliability as email devices. Barack Obama has been an avid user.

RIM has sought to expand its appeal to consumers but has had trouble because the phones aren’t perceived to be as sexy as its chief competitors’. RIM has been counting on improvements with its forthcoming BlackBerry 10 system but that has faced multiple delays. BlackBerrys also lag iPhones and Android phones when it comes to running third-party applications. Its touchscreen models that lack physical keyboards have largely flopped.

For that reason BlackBerrys are even losing ground in the business world, as employees demand iPhones or Android devices over BlackBerrys.

Apple sold 37m iPhones in the last three months of 2011 – more than what RIM shipped in the past three quarters combined. RIM shipped 11.1m BlackBerrys in the latest quarter, which ended on 3 March.

RIM also bombed in its efforts to produce a tablet computer to compete with Apple’s iPad. Among other things the PlayBook received negative reviews because it launched without an email program and the popular messaging service BlackBerry Messenger. In December the tablets that originally cost $500 were selling at $200, below the cost of making them.

BGC Financial analyst Colin Gillis said of the latest announcement: “They are conceding the high-end consumer market with all these services that are wrapped around the platform. At least there’s some reality here. Are they going to compete against iTunes? No way.”

Peter Misek, an analyst at Jefferies & Co in New York, said RIM should have recognised three years ago it was a niche player and had lost the battle with Apple three years ago. It should have looked at partnering with other companies last year rather than now.

RIM announced the changes as it produced quarterly results that fell short of Wall Street expectations. Net loss was $125m, or 24 cents a share, in the fiscal fourth quarter. This compares with $934m, or $1.78 per share, a year ago.

After excluding one-time items, adjusted income was 80 cents per share, a penny short of expectations from analysts polled by FactSet.

Revenue fell 25% to $4.2bn from $5.6bn. Analysts had expected $4.5bn.

For the full fiscal year RIM earned $1.2bn, or $2.22 a share, on revenue of $18.4bn. That compares with net income of $3.4bn, or $6.34 a share, on revenue of $19.9bn in fiscal 2011.

In extended trading after the results came out, RIM shares fell 33 cents, or 2.4%, to $13.40. During the regular session the stock increased 6 cents to close at $13.73.

Android 5.0 Jelly bean due in Q3

There’s still very little official information to be had about Android’s next major version, though even Google seems to have settled on the name Jelly Bean. Today DigiTimes quotes its anonymous sources (which are almost always hardware or component suppliers) saying that Android 5.0 is due in the third quarter of 2012. For those without a pocket planner handy, that’s between July and September. They also note that a new OS revision may be detrimental to the platform if Ice Cream Sandwich adoption continues at its glacial pace.

To be frank, DigiTimes excels at these sort of vague predictions. Based on Google’s previous development cycles, the next version of Android is almost guaranteed to come some time in the latter half of this year, whether it’s Jelly Bean or Android 5.0 (they may do another Gingerbread-style incremental update instead). Q3 is a little earlier than we expected, since both Gingerbread and Ice Cream Sandwich came in the fourth quarter, with Honeycomb serving as a sort of beta for the Android tablet platform. Given these extrapolations, their sources have a 50% chance of being right or wrong.

There’s an astounding lack of information on the next version of Android, with the sole rumor so far being centered around a docked desktop-style interface. We’ll almost certainly get some more information from Google at the Google IO conference in late June, including a confirmation of the name and version number. Until then, it’s all a chasing after the wind. You can expect another big reveal media event for the new OS, and whatever device ends up being its hardware counterpart, in late 2012.