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Wednesday, February 16, 2011, 03:00 pm PT (06:00 pm ET)

Motorola exec slips Google's plans for iTunes competitor

While Google's plans to set up a music service have been rumored for years, Motorola's chief executive Sanjay Jha slipped in describing the service as if it were already available, in a conversation promoting his company's new Xoom tablet.

According to a report by The Guardian, while speaking at the Barcelona Mobile World Congress, Jha said Google's Android 3.0 Honeycomb would add value to Motorola's Xoom tablet because it "adds video services and music services" critical to competing with Apple's iPad.

"If you look at Google Mobile services [in Android] today, there's a video service, there's a music service," Jha said, before correcting himself by saying, "…that is, there will be a music service."

Where is Google Music?

The idea of Google breaking into the music business isn't new. Back in 2006, the company was rumored to be working with Napster to set up an iTunes competitor, a move that resulted in a 2.2 percent hit on Apple's stock despite its five year head start in music.

Last March, SimplyMedia, the developer of an iPhone app that allowed users to stream music and media from their desktop iTunes to iOS devices, pulled its title from the App Store. It was then revealed in May that Google had killed the app after purchasing the company, and planned to use its technology to power similar functionality for Android.

Last summer, the discovery of a "Google Music" logo reanimated rumors that Apple would face direct competition from the maker of Android in the music and media business.

In September, just one day after Apple launched iTunes 10, Google was reported to be securing licensing rights with music labels that would allow it to open a music store by the end of the year.

A tablet music tie-in

Motorola's comments suggest that Google hasn't given up, and instead hopes to launch its music store as the lynchpin of its Honeycomb tablet release. So far, Google's tablet strategy is closer to Apple's original Newton than its iPad, offering lots of cool looking features without a clear sense of what it would actually be used to do to justify its relatively high cost, with models starting at $800.

Motorola Xoom


After giving up on Newton devices in 1998, Apple's tablet strategy was delayed while the company focused on building iTunes (2001), creating a music player, establishing a music business (2003), building a business in commercial TV (2005) and movie rentals (2008), launching a smartphone (2007) and building an App Store (2008), before finally returning to deliver the iPad (2010) as a blank canvas for using that vast library of apps, music, and video, starting at an aggressive $500 price.

Google does not have a standalone music app, nor a music store, nor a music or media device platform outside of Android smartphones, and its Android Marketplace is not living up to the company's expectations for selling apps.

By launching a music business targeted at the upcoming debut of its Honeycomb licensee's tablets, Google may jumpstart a new ecosystem. A parallel effort to court periodical publishers with a One Pass digital subscription model that is cheaper than Apple's and allows publishers full access to subscribers' valuable personal data is also accompanying the Android 3.0 launch.

However, Google faces the same issues Microsoft did in launching the Zune and its new Zune Marketplace in 2006: a device held back by a fledgling music store, and a music store held back by limited hardware sales. This may result in Google partnering with a company offering more experience in retail, such as Amazon, which already sells media and plans to enter the Android app business.

Google may also find it critical to expand its music strategy to actually leverage the installed base of Android users, nearly all of whom are on smartphones. The company pitched its new Android 3.0 Honeycomb release exclusively for tablets that do not yet exist on the market, saying that it planned to eventually bring many of those features to its smartphones users without offering details as to when that would happen.

A worthy competitor

Moves by Google to enter the established business of competitors have a mixed track record of success. Google essentially took the search and online advertising markets away from Microsoft and Yahoo ten years ago, and has become a leader in Maps, News, Translation, and other related online services. Its Android OS has virtually destroyed the market for JavaME, Flash Lite, Windows Mobile and Symbian as broadly licensed smartphone platforms.

Google has found it more difficult to enter other markets, making only minimal gains against Microsoft's Office suite with its own online web apps, and failing to best YouTube with its own Google Video, which required the company to buy its former competitor to enter that market.

Google has also experienced disappointment with efforts to create or enter existing markets with its Answers, Base, Buzz, Catalogs, Dodgeball, Google TV, Jaiku, Knol, Lively, Notebook, Orkut, Sidewiki, Nexus One, Wave and WebM initiatives.