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Report: Google To Release Own Android Smartphone & Chrome OS Netbook

Tuesday, October 20, 2009

"TheStreet’s Scott Mortiz is reporting that Google plans to sell a phone of its own. The device will supposedly run Android and will go on sale at retail stores this year. It would be an unlocked phone that would run on AT&T, T-Mobile, and most carriers around the world, and Google is supposedly undertaking the project to get more control over the integration of the device with its own services.

Moritz based his story on a report by analyst Ashok Kumar, who says he’s spoken with hardware companies involved in bringing the product to market. According to this GigaOM post, Kumar also says that Google will release a netbook (presumably running Chrome OS) next year, and that both the phone and the netbook will use Qualcomm’s Snapdragon CPU." [PCWorld]

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Smartphones and netbooks are obviously the hottest markets in computing right now. Google's rumored netbook would technically be a 'smartbook' due to its ARM based Qualcomm Snapdragon processor and Chrome OS operating system. Regardless, there are plenty of reason's why Google would elect to join in on the hardware competition, but couple of problems come to mind that would seem to get in the way of such a decision.

First off, Google is a software and services company with the bulk of their revenue coming from advertising. They don't make hardware.

Second, even is Google did decide to make hardware, they would be upsetting their partners such as Motorola who have working with Google to promote their operating systems and services.
The last major hurdle that Google would face relates specifically to their rumored smartphone. The report claims that this Google phone (likely to be manufactured by HTC) would be an unlocked device, allowing it to be used on any network, and sold through retail rather than carriers. This present challenges to both consumers and wireless carriers. Smartphones are sold through carriers as a method of subsidizing the price device for potential buyers. Smartphones are expensive when sold unlocked, so Google would have to make their device affordable. Additionally, while consumers would be able to have their choice of wireless service carrier, the carriers would likely require an activation fee for the device.

There is still upside for a software and services company electing to make their own hardware, especially when it's open source. Google can ensure that there is tight integration between their software and services with the hardware for an optimized experience. A good example of this is Apple's iPhone, Apple software optimized for Apple hardware. The only obvious difference is that the operating system, software, and hardware is proprietary and part of a closed system, while Google is open source and already has numerous manufacturers running Android and Chrome on a variety of different devices.

Nevertheless, it will be interesting to see how all of this plays out, especially between Google and their 'partners.'

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Posted by Carlos Olin Montalvo at 9:10 PM  

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