Google Tablet Partnerships Could Take a Bite Out of Apple

A Wall Street Journal report says Google is gearing up to offer a co-branded tablet to seriously rival Apple's iPad.

Aiming to boost sluggish sales of Android-based tablet devices in the face of Apple€™s iPad juggernaut (the latest version sold 3 million units its first weekend), Google may be planning to partner with hardware manufacturers to produce co-branded tablets that would be sold through a special online store, according to a report in The Wall Street Journal.

The company€™s recent $12.5 billion acquisition of Motorola Mobility€”approved by the U.S. Justice Department in February, paves the way for Google to start building that technology into its own tablets; however, the article quotes sources saying Google would partner with manufacturers like Samsung and Asus rather than build the tablet itself. Google said the Motorola deal was designed to "super-charge" its Android operating system ecosystem, and the DOJ's ruling concluded the Motorola acquisition and patent purchases would not lessen competition in the mobile market.

While Apple remains the clear winner in the tablet wars€”the company sold 11.1 million iPads in the September quarter, accounting for about three-quarters of all tablets sold to consumers, according to Canaccord Genuity€”a recent report from research firm IDC found Android tablets overall made significant gains in the space, expanding its market share from 32.3 percent to 44.6 percent between the third and fourth quarters.

Extending their reach into a co-branded and self-manufactured tablet device running the current version of Android 4.0 (or Ice Cream Sandwich) or the upcoming operating system (code-named Jelly Bean) could give Google traction on those gains.

€œThe sheer number of vendors shipping low-priced, Android-based tablets means that Google€™s OS will overtake Apple€™s in terms of worldwide market share by 2015,€ Tom Mainelli, IDC€™s research director for mobile connected devices, wrote in a March 13 note.

Google€™s last major attempt at co-branding a mobile device, the HTC Nexus One, debuted to mixed results in 2010. Google began selling the Nexus One solely online through a Webstore, eschewing the classic phone retail model where carriers invite consumers into their stores to buy handsets. The device, which Google itself designed from top to bottom to stand for what the company wanted in a high-end smartphone, cost $529 unlocked or $179 subsidized by a two-year deal from T-Mobile.

Android creator Andy Rubin, who serves as senior vice president of mobile and digital content for Google, acknowledged at this year€™s Mobile World Congress that while there are more than 300 million smartphones running the open-source operating system, only 12 million tablets run Android to date. Rubin also said that Google would "double down" on Android tablets in 2012, which led many analysts to posit he was talking about a potential Nexus tablet.

Whichever way the rumored tablet is eventually sold (if at all), The Wall Street Journal report suggested that brick-and-mortar retail stores like Best Buy are also likely to welcome any competition to Apple. €œSome retailers that sell iPads have chafed under Apple's rules that require stores to promote its products more prominently, these people said, and the retailers generate less revenue per sale of Apple products versus other electronic devices,€ the article noted.