Investors applauded after Google (GOOG) on Wednesday announced new versions of Android that will support wearable devices, cars and television, sending the company's stock up 2.5 percent at the close.
The excitement wasn't over a "killer" device that would immediately translate into massive new revenue for the company, but rather the search giant's move to engage Apple (AAPL) on key fronts. Google's new offerings will also widen its online platform, drawing more consumers to a range of products and, critically, convincing them to share their shopping and other valuable data.
Analysts with CRT Research said Google "now has a winning formula to conquer the living room -- with meaningful monetization likely to follow over the longer term."
Google had to respond eventually to Apple's growing strategic directions. The latter introduced its iPhone interface for cars earlier this year. At the 2014 Worldwide Developer, the company found new ways to expand use of its devices, including home automation and health monitoring. Apple is still rumored to be planning a wearable device called the iWatch, as it has been preemptively nicknamed. A new, more powerful version of Apple TV also may be in the offing.
In other words, Google and Apple remain in a race for the hearts and wallets of consumers. Google has made great headway in market acceptance, with Android-powered phones taking the smartphone lead globally and tablets using the operating system gaining market share. Its recent acquisitions of Nest and Dropcam showed a focus on home security and automation. Music and video offerings underline the company's interest in diving deeper into entertainment.
To compete with Apple, Google has to show a willingness to enter the same consumer markets that its rival is targeting. That's what the newest version of Android, called L, showed. First, Google had been working on features similar to what Apple has recently added to iOS, including automatic owner recognition for improved security and 3D graphics capability for better gaming.
Then came the checklist of future markets. Android Wear for wearable computing includes health-tracking, navigation apps and voice-activated ride-sharing. More than 40 automakers -- more than Apple has recruited so far -- have signed on to include Android Auto. Meanwhile, Android TV can take video-streamed movies, TV and game feeds from any device and project them onto a TV screen.
The ability to have any or all of these versions of Android working together means that Google has greatly increased the potential reach of its ecosystem, as well as the markets for developers and possible arenas for advertising, which is the company's bread and butter.