Google Inc’s bid to compete with
Microsoft Corp’s
Windows operating system may help lower the cost of personal computers at a time when prices are already being pinched by inexpensive netbooks.
Google said it will offer its just-announced
Chrome Operating System for free when it is launched in the second half of 2010, a move that could force
Microsoft into a price war. Although
Windows is the dominant operating system - installed on 90% of the world’s PCs,
Microsoft won’t take
Google’s challenge lightly, analysts said. Its new
Windows 7 operating system will be available in October. "Microsoft’s strategy is likely to be to compete on price,” said Brent Williams, an analyst with the Benchmark Co “Now there’s a competitor with the muscle and the brand recognition.
Google is that company".
Google said
Chrome OS, which is based on the open-source
Linux code, is being designed for all PCs but will debut on netbooks. It makes sense for
Google to initially target the stripped-down, Web-centric netbooks, one of the only segments showing any growth in a PC market that is contracting. Netbooks generally sell for $300 to $400, but prices are dropping as new offerings flood the market and wireless carriers offer subsidies with the purchase of a data plan.
Google, which already offers a suite of e-mail, Web and other software products that compete with
Microsoft, said that it would launch a new, free operating system that will initially be targeted at netbooks. Called the
Google Chrome Operating System, the new software will be in netbooks for consumers in the second half of 2010,
Google said in a blog post, adding that it was working with multiple manufacturers. Netbooks are low-cost notebook PCs designed for Internet surfing and other Web-based applications. It’s been part of their culture to go after and remove
Microsoft as a major holder of technology, and this is part of their strategy to do it,” said Rob Enderle, principal analyst at Enderle Group. “This could be very disruptive. If they can execute,
Microsoft is vulnerable to an attack like this, and they know it.
GoogleMicrosoft have locked horns over the years in a variety of markets, from Internet search to mobile software. It remains to be seen if
Google can take market share away from
Microsoft on its home turf, with
Windows currently installed in more than 90% of the world’s PCs. Key to success will be whether
Google can lock in partnerships with PC makers, which currently offer
Windows on most of their product lines.
Google said in a blog post on Wednesday that it is working with a number of PC makers including
Hewlett-Packard,
Acer, Lenovo and
Asustek, as well as chip makers
Texas Instruments and
Qualcomm to design and build Chrome devices. The news comes as executives from the world’s biggest technology and media companies, including
Google and
Microsoft, gather in Sun Valley, Idaho for an annual conference organized by boutique investment bank Allen & Co. A spokesman for
Microsoft declined to comment.
Microsoft shares rose 3¢ to close at $22.56 on the
NASDAQ.
Google shares rose 1.5% to $402.49. The new
CHROME OS is expected to work well with many of the company’s popular software applications, such as
Gmail,
Google Calendar and
Google Maps. It will be fast and less memory-intensive, enabling users to access the Web in a few seconds,
Google said. The new operating system is based on open-source
Linux code, which allows third-party developers to design compatible applications. “The operating systems that browsers run on were designed in an era where there was no web,” Sundar Pichai, vice-president of product management at
Google, said in the blog post. The
Google Chrome Operating System is “our attempt to rethink what operating systems should be”.
Google said the operating system was a new project, separate from its Android mobile operating software found in some smart phones. The new system is designed to work with
ARM and
Intel Corp’s x86 chip platforms, the main chip architectures in use in the market.
Microsoft has previously said it would not support PCs running on ARM chips, allowing
Google an opportunity to infiltrate that segment. Charlene Li, partner at Altimeter Group, said Google’s new system could first appeal to consumers looking for a netbook-like device for Web surfing, rather than people who use desktop PCs for gaming or high-powered applications. But eventually, the operating system has the potential to scale up to larger, more powerful PCs, especially if it proves to run faster than
Windows, she said.
Google said the new OS would be free to use. Enderle noted that the company’s business model has been to earn revenue from connecting applications or advertising.
Microsoft declines to say how much it charges PC brands for
Windows, but most analysts estimate about $20 for the older
XP system and at least $150 for the current
Vista system.
Altimeter’s Li added: “A benefit to the consumer is that the cost saving is passed on, not having to pay for an OS. It’s clearly positioned as a shot across the bow of
Microsoft”
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