Can Google Android Beat Windows 7 in the Netbook Market?

Can Google Android Beat Windows 7 in the Netbook Market?

Acer announced earlier this week that it's planning to release an Acer netbook with Google Android installed in the third quarter of 2009. It's a major announcement. Right now, Acer offers a variety of netbooks under its Aspire One line and they all have Windows running natively when shipped. For the first time, it's Google -- not Linux -- that will take Microsoft on in the PC space. And by the sound of things, Acer wants to see Android take off.

"Netbooks are designed to be compact in size and easy to connect to the Internet wherever you go," Jim Wong, Acer's president of IT products, said in a statement. "The Android operating system offers incredibly fast wireless connection to the Internet. For this reason, Acer has decided to develop Android Netbooks for added convenience to our customers."

Over time, every netbook Acer releases will give consumers the option of installing Windows or Android.

Microsoft has yet to comment on Acer's decision to bring Android into the netbook mix, but you can bet Steve Ballmer and Company are quite upset. For the first time, Google is creeping into a territory that Microsoft fully controls. A few years ago, that might not have mattered. But today, when the company is in a bitter battle online with Google, it matters more than you might think. Microsoft really doesn't like Google.  Google really doesn't like Microsoft. And now, Google is taking aim at the software giant in the hope that it can take it down in the netbook market.

It won't be easy. According to a recent study, more than 90 percent of all the netbooks currently available run Windows. Windows 7 -- Microsoft's follow-up operating system to Windows Vista -- will ship with a netbook-friendly version of the software (Windows 7 Starter Edition) that Microsoft hopes, will solidify its position as the leader in the netbook space.

Another part of Microsoft's strategy is to rename netbooks. Microsoft wants to change the name of netbooks to "Low cost small notebook PCs." At first glance, it might seem like Microsoft's horrible name-picking division is at it again (remember Zune and Bing?), but it might actually be a business ploy.  A "Low cost small notebook PC" might be required, by Microsoft, to use more advanced versions of Windows 7. That means companies like Acer and Asus would be forced to pay more for the software, thus cutting into their netbook margins, which are already too low. It's a boon for Microsoft -- and a real issue for netbook companies.

Perhaps that's why Acer turned to Google. By joining the Open Handset Alliance, Acer won't be required to pay those steep fees for Android like it's forced to pay for Windows. Immediately, Acer can enjoy higher margins on its netbooks. It's a major advantage for Android that Microsoft should be worried about. If Acer is successful in selling Android-based netbooks, you can bet Asus will follow suit. It would only be a matter of time before Android cuts in to Microsoft's 90 percent market share.

Is Android Strong Enough?

But now, the real question is whether or not Android is powerful enough to stand up to Windows. Is it capable of achieving the kind of success Acer requires?

I think so.

The beauty of Android is that it's easily modified. In the PC industry, differentiation is a key success factor. Without it, there's no way for the customer to decide between computers. That's why in the notebook space, the computer's design is so important. If Microsoft has its way, the same will be true in the netbook sector -- the OS will be the same in the vast majority of computers, requiring vendors to innovate on design.

Android changes that. The open OS gives Acer the opportunity to develop an Android operating system that's unique to its hardware. That means Acer can modify its design to make it more appealing to netbook users. The company can even change what sort of software comes bundled with the OS.

Which brings us to another point: apps. Thanks to the Android Marketplace, anyone who buys the Acer netbook with Android installed will be able to immediately enhance it. No matter what they're looking for, from project management to music apps, the Android Marketplace will provide users with what they want at little or no cost. Plus, those apps can be downloaded from the Web, so the need for a DVD drive in the netbook -- a major complaint for Windows-based netbook users -- won't be so great. That will, once again, contribute heavily to the affordability of the netbook.

We also can't discount the possibility of hardware advancements. Right now, netbooks are mininotebooks, complete with a touchpad and keyboard. But consider the fact that Android was originally developed to be an operating system for touch screen devices, and it quickly becomes clear that netbooks sporting Google technology might become more advanced than we think.

Doesn't it stand to reason that because Android was developed for touch screen devices, Acer might try to release a netbook sporting a touch screen? It's a real possibility.

And just for good measure, let's list all the features Windows 7 Starter Edition -- the SKU designed for "Low cost small notebook PCs" -- won't have:

• Aero Glass.  Users can only use "Windows Basic" themes.

• The ability to change window colors, sound schemes, and desktop backgrounds.

• The option to switch users without logging off.

• DVD playback.

• Windows Media Center.

• Media Streaming.  Users won't be able to stream music, videos, or television from a home computer.

So there you have it. Windows 7 Starter Edition will be a joke. Some say it's designed for netbooks, but comparing it to Android, which provides an unlimited number of possibilities and apps that can extend the functionality of the OS far beyond Windows 7, doesn't make much sense. Acer made the right move by bringing Android to netbooks.  It might not be the most obvious choice, but it's starting to look like it's the best choice. Watch out, Microsoft. 

Google could make you look foolish -- again.