Can Google's ‘Home Entertainment System’ Compete with Apple iTV?

The device will be marketed as a Google product, according to the Journal's sources, which will be the first time in the history of the company that it has released a full-fledged consumer electronics device under its own name.

Google will work to deeply integrate its mobile operating system -- Android -- with the home entertainment system. The system will let people download digital media and stream it across the home. Also, Android-based tablets and smartphones will be able to control the unit.

The Google home-entertainment system will be unveiled later this year.

The announcement from Google comes as rumors about Apple's television set, dubbed iTV, have started to surface. The rumors about iTV became so rampant that Best Buy surveyed customers about their interest in such a device. Details about iTV have been fragmented and come from several sources.

The most conspicuous came from Digitimes, which said, the supply chain of Apple started preparing material for [TV] sets in the first quarter of 2012 in order to meet Apple's schedule to launch the new display products in the second or third quarter of 2012. The report claimed that iTV will be available in 32- and 37-inch size TVs manufactured by Apple.

Adding to the mounting rumors, Toronto-based newspaper Globe and Mail reported that Rogers Communications Inc. and BCE Inc. were talking with Apple about becoming launch partners for iTV. The Globe and Mail have reported that Bell and Rogers currently have the product in the companies' labs.

Ultimately the key for both organizations will be securing content. Apple has had trouble securing media content from many of the networks, including CBS. During an earnings call, chief executive officer of CBS Les Moonves accidentally mentioned that the company decided against joining Apple TV.

The major networks have historically earned revenue through TV subscribers and advertising, which makes most of the old TV companies resistant toward making their news shows available for online streaming. Although network television companies often partner with Internet-based companies -- such as Viacom and Amazon -- most of the shows that are made available for streaming are dated.

Despite resistance from major network television companies, people are watching longer videos during primetime. A study conducted by Yahoo shows that peak online video viewing is between 6 and 9 p.m., the hours long regarded as primetime for television. Just two years ago, those hours showed a dip in online video viewing, presumably because people preferred to watch video on their television sets.

Though people are not yet parting with traditional TV, the major shift in viewing habits shows that the television market is ripe for change. Whether Google or Apple are able to introduce a device that's able to change the way people watch TV is an entirely different story.