In the week or so since Google (NSDAQ: GOOG) announced it’s going to release its own operating system, the Web has been littered with commentary and analysis about “what this means” for one company or another…even though we know almost nothing about that product, Chrome OS. We know it will have a new windowing system on top of a Linux kernel, and that “the Web” will be the development platform. But that’s about it. So it’s a bit early to be making predictions about the impact of Chrome OS.
Aw, who am I kidding? Making predictions about things we know nothing about is what the Internet was made for, amiright? So in the spirit of talking through my hat, here are the two Chrome OS-related thoughts that kept my brain busy over the past week.
The risk to Apple is netbook-sized
For some reason, more than a few pundits have speculated that the (as of right now) vaporware that is Chrome OS is a threat to Apple (NASDAQ: AAPL). As an analyst interviewed by Computerworld put it, “This exposes the consequences of letting a gigantic gap open between [Apple’s] lowest-priced notebook and cheap netbooks.”
Now, I don’t pretend to argue that there’s not a considerable gap, at least in terms of price, between Apple’s least expensive laptop ($999) and the typical cheapbook netbook ($200 to $300). Indeed, netbooks have been selling well, even though consumers are realizing they aren’t a substitute for “real” laptops. But so far, the consequences of this price gap to Apple have been reflected in, well, increased laptop sales.
Sure, there’s an argument to be made that dirt-cheap laptops take some amount of sales away from Apple on the low end. But that’s the case whether such laptops are running Google OS, Ubuntu, or any other “free” OS–or even Windows. Netbooks are exercises in compromise: Buyers trade performance and features to get an inexpensive, lightweight laptop with a tiny footprint. So a (theoretical) better OS isn’t going to suddenly make these computers more of a threat to Apple, because their limitations go far beyond the OS.
The people who should be worried here are the Ubuntu folks. Ubuntu has come a long way; the current version is vastly better than what you got just a few years ago. Thought it’s still not, in my opinion, a serious challenger to Mac OS X or Windows for consumers, it’s a perfectly usable OS for netbook-level tasks. I used it on my own netbook before I installed OS X, and it handled Web browsing, e-mail, and word processing just fine. But these appear to be exactly the kinds of tasks Google will be focusing on with Chrome OS (see below), and it’s the low-end PC market where Chrome OS will surely gain the most traction. Considering Google has already announced several hardware partnerships, Ubuntu’s recent growth could well be the first casualty of Google’s encroachment into the OS market.
Why Google has a chance
At the same time some pundits are touting Chrome OS as a threat to Apple, others are already writing it off as a “serious” operating system. But I’m not convinced Google’s odd little monkey of an OS won’t see some success in the budget-computer market.
According to NPD, more than 40 per cent of netbook buyers are unhappy with their computers, and the main reasons appear to be that netbooks don’t have all the features of regular computers; in the case of netbooks running Ubuntu or another free Linux variant, the user interface is considerably different from what most people are intimately familiar with; and most netbooks don’t perform as well as “regular” laptops.
Vendors can’t do much about the first issue, limited features, without dramatically changing what a netbook is–something that’s already starting to happen, as we see netbooks with larger screens and keyboards at higher price tags. But the second issue, an unfamiliar software interface, has a couple solutions. The first is to install Mac OS X or Windows; some people are installing the former, illicitly, and many netbook vendors will pre-load the latter for a premium.
The second is to make the free OS’s interface more familiar–something the designers of many Unix windowing-system developers have been trying to do for years with varying degrees of success. Google’s advantage here is that by creating an OS based on Web apps, the company has a huge head start: It’s already the world’s premier developer of online apps. Millions of people use Google’s versions of core productivity tools: Gmail, Google Docs & Spreadsheets, Google Calendar, Google Maps, Picasa, Google Reader, Google Finance, Google Sites, Google Health…the list goes on and on. Google’s stable of software even includes the Task-Bar-like Google Toolbar. And, of course, the company also offers several desktop apps: Google Desktop, Google Chrome, and Picasa.
As a result, millions of users are intimately familiar with the interfaces of Google’s tools. And not just any users–precisely the users most likely to purchase a netbook in the true “netbook-y” sense of the word: an inexpensive computer for getting online and using online-focused tools. In this context–an OS with limited compatibility and a non-standard interface that’s free to put on any cheap computer–a Google OS has clear advantages over something like Ubuntu, and thus could be a compelling alternative.
The beauty of this approach is that if Google does things right, Chrome OS could also address the third issue I mentioned above, performance. I’m oversimplifying here, but if Chrome OS is essentially a Web browser running on top of a Linux kernel, it seems reasonable to assume that an inexpensive, underpowered computer running Chrome OS will outperform the same computer running a Web browser on top of a full-blown “traditional” OS running on top of a Linux kernel. In other words, for netbook-level tasks, performance might be much less of an issue.
The key question here is Google’s goals. If the company isn’t aiming to be the developer of a full-featured computer operating system, but rather to provide a free and familiar interface for inexpensive Internet appliances (hello, late 1990s!), Google has a legitimate shot. For millions of people, “using the computer” doesn’t involve much more than browsing the Web and performing tasks adequately addressed by Google’s existing tools. If the company–and hardware vendors–can convince these people they don’t need anything beyond such capabilities, they just might go for a “Google computer”: a $200 laptop that really is a netbook.
