Tablets are insanely versatile, and Google's selling its new entry as a total content device with brand new Jelly Bean bells and whistles. Still, let's face it: at this size and price point, the Nexus 7's natural competitors are first and foremost reading-centric tablets like Amazon's Kindle Fire. And make no mistake: Google is selling this as a reading device, adding magazines to Google Play and touting its bookstore as "the world's largest ebook collection." That's the play here: inexpensive hardware, subsidized by selling media, driving customers towards Google's ad-supported services.
Books and magazines are important not for their own sake, but for Google's long-term strategyIn other words, books and magazines are important not for their own sake, but for Google's long-term strategy. For years, Google Books has been a store with no physical storefront, even as Apple and Amazon convinced millions of us to walk around with networked shops in our bags and pockets. Add in the rejected settlement and ongoing lawsuits with the Authors' Guild over out-of-print books, and Google's attention wandered elsewhere. Meanwhile, book retailers like Amazon and Barnes & Noble carved huge chunks out of the Android tablet market. The booksellers' customer base helped them branch out, forking the platform and substituting their app stores for Google's.
So like Microsoft, Google needs to make its own hardware both for its own sake and to show Android OEMs how it's done. But it also needs to stop the Kindle and Nook from bleeding Android dry. Google has to show that the latest and greatest official version of Android performs as well or better on a reading machine than its older forked counterparts.
Google may be the only company capable of a slugfest with Amazon and AppleFinally, Google's in a good position to break up some of the power monopolies in digital reading. Book publishers are deeply unhappy with Amazon, and magazine publishers aren't wildly happier with Apple. Google may be the only company with the money, resources, global reach, and platform power to stay standing in a slugfest with Amazon or Apple. If that means more competition and better choices for customers, so much the better.
It's all a question of whether Google actually cares about these businesses enough to stay focused on them. It should care. Remember, Google's original motto, long before "don't be evil," was to "organize and make accessible the world's information." Books and magazines clearly have a lot of information. It's not just their content, but the data around the content: who owns, reads, highlights, shares, and searches for what, where, and when? A smart, ad-savvy company like Google can surely think of good ways to put rich information like that to use.