Updated from 11:10 a.m. to include additional comments in the sixth paragraph.
SAN FRANCISCO (TheStreet) -- Google (GOOG) seems intent on attacking Apple (AAPL) from all angles, reportedly getting set to announce a set-top box similar to Apple TV and Amazon's (AMZN) recently announced Fire TV even if the device won't move the needle on revenue.
Google is reported to be launching its own set-top box, known as Android TV, entering an increasingly crowded field and one that it's already in, which makes the move all the more curious. Google currently sells Chromecast, a $35 dongle that is plugged into a HDMI output on a television, giving consumers access to software like Netflix (NFLX), Hulu Plus, YouTube, HBO Go, WATCHESPN, MLB.TV, and others. It even offers access to the Google Play Store, Google's answer to Apple's App Store, which has seen more than 75 billion downloads and counting.
Google's move comes at a time when smart TVs -- televisions that connect to the Internet -- are just starting to take off. Smart TV shipments represented approximately 39% of TV units shipped globally last year, up from roughly 25% in 2012, according to noted venture capitalist Mary Meeker, of venture capital firm Kleiner Perkins Caufield & Byers.
Google's senior vice president of Androids, Apps and Chrome, Sundar Pichai, made public comments about Chromecast during a keynote speech at South by Southwest, noting the company has sold "millions" of Chromecast devices without giving a specific number.
Last quarter, Google generated non-GAAP earnings of $6.27 a share on $12.19 billion in revenue, excluding traffic acquisition costs. Google site revenue of $10.47 billion rose 21% from last year's first quarter and accounted for 68% of Google's revenue.
One hedge fund analyst agrees that the set-top box business isn't a "needle mover" for Google, but winning the over-the-top (OTT) video service is important down the line. "Longer-term, winning in OTT video will be material and of great importance," the analyst said, who declined to be named because they were not authorized to speak. "Amazon and Netflix need to win, it would be really nice for Google or Apple if they win, but it's not in their valuation now, like it is for the others."
Apple has sold more than 20 million Apple TV units since inception, and the device generated more than $1 billion in revenue for Apple in fiscal 2013, according to CEO Timothy D. Cook.
Google couldn't be reached for comment for this story.
By having its own streaming media device, Google addresses the fact that not everything can be stored in the cloud and that some local storage is needed, unlike Chromecast, where everything is stored in the cloud. Android TV may also offer a completely different user interface than Chromecast, looking very similar to Fire TV, allowing users to scroll through movies, apps, games and TV shows.
The news of Google's set-top box was first reported by The Verge.
A look on Amazon's Web site showed that the Chromecast is the No. 2 selling streaming media device, behind Amazon's own Fire TV, which was announced in April.
"The problem with Google and consumer electronics is they always do something 'Googley'," said Hudson Square Research analyst Dan Ernst over the phone, noting that Google is the typical Silicon Valley company, assuming everyone has to have access to the best products. "They don't do either what the consumer wants, or what the entertainment industry necessarily wants."
If the as yet-to-be announced set-top box includes the most popular apps, including the aforementioned Netflix and Amazon, the potential is there for Google in a crowded space. Apple is reported to be working on an updated version of its Apple TV set-top box, which may include a dedicated app store, something the company has eschewed in the past.
Aside from Apple, Amazon and Google, Roku is also a key player in the space, having several different versions all at various price points. There have been reports that Mozilla, the Web browsing company, is also working on a streaming device, something the company denied but later noted one of its partners might be working on.
For Google to be successful with its new venture, it has to encompass not only all the features (ease of use, voice navigation, apps) consumers want, but the content as well. "The content is still an issue," Ernst noted. "Unless it has all the major content companies, which no one else has been able to do, then it's just a showcase of other content offerings."