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    Google Chrome OS Is a Direct Challenge to Microsoft in the Netbook Market

    By
    Michelle Maisto
    -
    July 13, 2009
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      Google chief executive Eric Schmidt recently declined to discuss the possibility of a rivalry between Microsoft and Google, which will be shipping a new operating system, Chrome OS, later this year.
      Analysts from research firm iSuppli, however, are predicting that Google is ready to take on Microsoft, and additionally that sales of netbooks – for now the intended device for the Chrome OS – will more than triple by 2012.
      “Google’s launch of the Chrome Web browser served as a preliminary bout in the company’s battle with Microsoft, taking on the market leading OS, Internet Explorer,” said Matthew Wilkins, a principal analyst with iSuppli, in a July 10 report. “However, with the PC OS version of Chrome, Google is ringing the bell for the main event.”
      Wilkins continued, “The arrival of the Chrome OS is a direct threat to one of Microsoft’s main revenue streams: sales of the Windows operating system for netbook PCs. It also comes at a time when Microsoft is on the eve of launching its most promising operating systems in a number of years: Windows 7.”
      Windows is currently the dominant operating system on netbooks, while Linux, which Chrome is based on, takes a distant second place. Wilkins explains that the disparity between their positions is largely due to the lack of a strong Linux brand name.
      “For Google to be successful, it needs to promote and position its brand so that non-tech-savvy consumers will be comfortable buying a netbook running its operating system rather than one from Microsoft,” Wilkins said in the statement.
      This will be a major challenge for Google, he explained, and would entail Google establishing deals with OEMs that will put the Chrome OS name on devices when they ship from their factories. The alternative is for users to install client software themselves, which is “at considerable odds with the basic PC knowledge of the typical netbook user,” said Wilkins.
      The Chrome OS is a good fit for netbooks, which are light on the hardware side and primarily meant to connect users to e-mail, messaging and the Internet. Chrome OS, too, encourages “cloud computing,” which makes iSuppli senior director and principal analyst Jagdish Rebello believe it will encourage data usage on netbooks and notebooks.
      “Google’s Chrome OS has the potential to drive increased data usage on netbooks and notebooks in a way that allows operators to monetize this data traffic,” said Rebello in a statement.
      “Revenue from broadband access will be a very important component of the data revenue of total revenues of wireless carriers worldwide. iSuppli projects that global revenue from mobile broadband access will grow to more than $180 billion in 2013, up from $61 billion in 2008.”
      iSuppli reports that it expects worldwide shipments of wirelessly enabled netbooks – those supporting WLAN, 3G WLAN and Wireless Metropolitan Area Network (WMAN) connectivity – to reach 17.8 million units in 2009, 23.8 million units in 2010 and 30.225 in 2011, before arriving at 2012’s predicted 36.3 million units.
      In addition to netbooks, Chrome OS is expected to run on netbooks based on Intel’s X86 processor architecture, as well as those using ARM-based chips.
      Other analysts have said they need to see more of the Chrome OS before they believe it will prove disruptive to Windows.

      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
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