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Rumors are starting to swirl around the Web to the effect that Google might be planning to make a netbook. The idea is simple: By offering a netbook, Google can get its software out to those who want it, while taking in some of the revenue that it would otherwise lose by partnering with third-party vendors. At first glance, it might make some sense. After all, why would Google want to leave what could be major cash on the table?
But a more thorough analysis of the market reveals that Google will never release a netbook. If Google is to be successful with Chrome OS, it will need to work well with third-party vendors. And it certainly can’t step on any toes as it attempts to increase the popularity of its online operating system. The company simply can’t afford to offer a netbook.
1. The vendors
Again, it’s just too risky for Google to create its own netbook when it’s trying desperately to find vendors that will bundle Chrome OS. If it offers just the software, more companies will be willing to jump on board with Chrome OS. But if those same companies know that Google is working on hardware of its own to compete against their products, they’ll have no reason to work with Google. The search giant would water down the market.
2. Google is a software company
Although the company plans to release its Nexus One smartphone in the coming months, that product was built by phone vendor HTC. Google is simply not a hardware company. Its core competency is providing a user experience through online services and software. That is the focus that has helped Google become so powerful. It shouldn’t stray from that.
3. The support conundrum
A major problem with offering hardware is supporting it. Problems arise with hardware that cause major headaches for the company offering it. Google will have enough issues to deal with when Chrome OS launches. To add a whole new set of problems on top of that doesn’t make much sense.
4. The Microsoft model works
There is a reason why Microsoft never developed a computer to compete against Dell, Hewlett-Packard and the rest: It would have killed its software business. I believe that Google realizes that and understands the issue of competition in the marketplace. Microsoft has made a killing working with vendors. Google could too.
Google Flirting with Crowded PC Hardware Market
5. Hardware design is a costly business
It’s also important to note that hardware is an extremely costly business to get into. Not only is the startup cost of building the first machine high, but after that, Google will be forced to refresh the device as new components are made available. That leads to even more R&D costs that just aren’t worth the effort. And considering that margins on netbooks are notoriously low, the net effect might not meet Google’s standards.
6. Chrome OS is the real cash cow
If Google wants to make as much money as possible off Chrome OS, it needs to forget about hardware. Chrome OS is unique; it’s the next frontier in software. Google has an opportunity to capitalize on that and make its own operating system the first wildly successful OS competitor to put Microsoft on notice in years. Chrome OS could be a cash cow for Google. That should be its focus, not hardware.
7. It could limit OS adoption
Microsoft has taught Google an important lesson: The more computers an operating system is on, the greater the chance that the OS will be successful. If Google offers up a netbook running Chrome OS, most folks will probably rush to the company’s hardware. All the while, third-party hardware sales will be slumping. Google will then lose all vendor support. At that point, Chrome OS will become just another Mac OS X. That’s not what Google wants.
8. It’s about integration
The real value of Chrome OS is the opportunity to integrate it with other Google services. People using Chrome OS will be more likely to use only Google services, rather than switch to Bing or Yahoo. It’s simple convenience. If Google Search, Gmail and Google Docs are readily available in Chrome OS, why switch to anything else?
9. There’s no easy way out
Let’s say Google’s netbook does poorly. If it does, Google might have trouble handling that situation. The company might be able to simply get out of the hardware business entirely, but that’s unlikely. By then, vendors would have lost trust in Google, so hardware running Chrome OS would dry up. In the meantime, Google pulling out of the hardware business could hint to consumers that the operating system isn’t as great as Google wanted them to believe. Google shouldn’t put itself in that position. It should just focus on software.
10. Hardware gets in the way of good plans
Any amount of time that Google dedicates to hardware design over software improvements will only hurt Chrome OS. Take the Apple iPhone, for example. Sure, it’s a great device. But the first iteration of the device lacked features such as copy and paste, a camcorder and native third-party apps, to name a few. It was unfinished. Google can’t afford for Chrome OS to be unfinished. It needs to focus all its attention on software and forget hardware.