Internet search giant Google Inc. ( GOOG ) recently launched a black plastic dongle called Chromecast that can be hooked up to the HDMI port in televisions to access content from the Internet in real time via Wi-Fi. Google is selling the device at $35. Being the cheapest device bringing Internet to the TV, Chromecast could easily become an impulse purchase.
Chromecast works with mobile devices based on Google's Android OS and those powered by Apple Inc. 's ( AAPL ) iOS. While additions like Pandora music will be available soon, the device currently streams any content visible through Google's Chrome browser, including YouTube videos, content bought on Google's Play Store, as well as TV shows and movies streamed by Netflix ( NFLX ).
In fact, Google is offering a 3-month free trial of Netflix's video streaming services with it, which makes it particularly attractive given Netflix's Emmy Award nominations. The device will be available at Bestbuy.com, Amazon.com and Google Play store.
The device will make video streaming to the TV mainstream (most of the streaming is currently done on PCs, tablets and smartphones. Through Chromecast Google is trying to make its way into people's living rooms. Technology companies have been eyeing the digital home entertainment space for some time now, not only because of the good growth prospects but also because of several new technologies including the cloud.
However, competition will be fierce, with most of the large technology companies foraying into similar Internet-based video programming businesses. Google will compete with Apple Inc., which already sells its own set-top box called Apple TV, Roku and other content streaming devices, including game consoles like Xbox and Playstation.
Further, Amazon ( AMZN ) has also entered this space with its own set-top box. Chip maker Intel Corp. ( INTC ) is also eyeing this space and expects to launch its own Internet-based TV service and an accompanying set-top box. Whether Google can edge past other tech giants in the attractive home entertainment market remains a wait-and-see story.
In the second quarter of fiscal 2013, Google reported solid earnings of $7.81 per share that missed the Zacks Consensus Estimate by $1.23 or 13.7%. Google's gross revenue (including total traffic acquisition costs [TAC]) came in at $14.10 billion, representing sequential and year-over-year growth of 1.0% and 19.5%, respectively. Google's standalone revenues grew 1.2% sequentially and 19.5% year over year but Motorola's growth rates continued to lag.
Google has a Zacks Rank #5 (Strong Sell).
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