Editor's note: This story has been changed since it was originally posted to correct the price of the Nexus Q. It is $299, not $199.
Google's new consumer media streaming device, the Nexus Q, poses little threat to Apple's growing Apple TV business, analysts said, with one calling Google's sphere an "Apple TV-1."
The Nexus Q, which Google unveiled Wednesday at its annual I/O developers conference, comes with a $299 price tag and will start shipping next month. Consumers can pre-order one from the Google Play online store.
The Q streams music purchased from Google Play and stored on the company's cloud servers; it will also deliver movies and video from Google Play and YouTube. The device is controlled by an Android-powered smartphone or tablet.
Most analysts pegged the Nexus Q as Google's attempt to compete with Apple TV, the puck-shaped piece of hardware that streams music, movies and TV episodes purchased from iTunes, including those stored on other hardware, such as a Mac or a Windows PC, in the user's house.
"The Q, it's the Apple TV-1," said Ezra Gottheil, an analyst at Technology Business Research, in an interview Wednesday. He was referring to Google's $299 price point, which is the same as the opening cost of the hard-disk-drive-equipped Apple TV when it launched in March 2007.
"[The Nexus Q] looks great, but it's very high-priced," added Gartner analyst Michael Gartenberg, also in an interview yesterday. "I don't understand that."
Apple TV's price fell to $99 in September 2010 when then-CEO Steve Jobs revealed a smaller device that didn't include local storage and instead streamed content from the cloud and other local devices.
Andrew Ladbrook, a senior analyst at Informa, was more damning in his take.
"Despite some very high specifications and a very attractive unique design, the Google Q device is underwhelming," said Ladbrook in an email today. "The majority of the features can already be found in Apple's Airport Express devices and Apple TV."
And Ladbrook questioned Google's Nexus Q strategy.
"It is also an ill fit into Google's wider Android strategy.... Its high price point will depress sales, reducing its role as a complement to the Android handsets," said Ladbrook. "Google [Nexus] Q devices are unlikely to have the same lock-in effect as Apple's cheaper Airport Express and Apple TV. It is particularly strange that the media-sharing feature at the heart of [Nexus] Q has not in some form been pushed into Google TV."
Airport Express is Apple's $99 Wi-Fi base station. Using Apple's AirPlay feature, consumers can stream music in their iTunes collections over a home's wireless network from a Mac, a Windows PC, an iPhone, an iPad or an iPod Touch.
According to current Apple CEO Tim Cook, Apple sold 2.8 million Apple TV devices last year. But as of late May, Cook said during an interview at the Wall Street Journal's All Things Digital conference, approximately 2.7 million Apple TVs had been sold in 2012, putting it on a sales pace of about 6.5 million units. That would represent a 132% year-over-year growth rate.
While Jobs once dismissed the Apple TV as a "hobby" for his company -- an assessment likely predicated on the small revenue stream it generated -- Cook said Apple isn't planning on ditching the technology or the device.
"We've stuck with it. This is an area of intense interest for us. [So] we're going to keep pulling the string and see where it takes us," Cook said in May. "I think many people would say, [TV] is an area in their life where they're not really pleased with it."
The Nexus Q, like the Nexus 7 tablet that Google also introduced yesterday, will be sold only through the Google Play store. Unlike Apple, which has a large chain of brick-and-mortar stores and long-established relationships with other retailers, Google has neither: The media-streaming device is the company's first in-house-designed hardware product.
