In Challenge to Microsoft, PC
Test Laptops Running Google Software
JUSTIN SCHECK & NICK WINGFIELD
Wall Street Journal 1apr2009
Hewlett-Packard Co. and other PC makers are considering using free software developed by Google Inc. to run some small computers, a move that would open a new front in the battle between the Internet giant and Microsoft Corp.
PC makers are testing Google's Android operating system—which has so far been used to power mobile phones—for use in new models of so-called netbooks, inexpensive laptops that have become the fastest-growing segment of the PC industry.
Google, which dominates Internet search, already challenges Microsoft on other fronts, including with its free word-processing and spreadsheet software, neither of which has succeeded in denting Microsoft's Office suite. The effort to move Android to netbooks targets Windows, which generated more than 60% of Microsoft's operating profit in its last fiscal year. More
* Digits: AT&T Unveils $49.99 Netbook Offer * China Journal: Google Marks April Fools' Day
Moving Android to netbooks will be an uphill effort because the software does not run popular PC programs. That is one reason that Windows now runs on the majority of the low-end laptops, even though early models used the Linux operating system.
But H-P, the largest maker of PCs and a major Windows partner, has programmers testing Android for a potential netbook, said people briefed on the matter, though they said the company hasn't decided yet whether to move ahead with the project.
"We want to assess the capability Android may have for the computer and communications industries, and so we are studying it," said Satjiv Chahil, a vice president of H-P's PC division.
Taiwan's Asustek Computer Inc., which is the leading seller of netbooks by units, has also said it is considering making an Android-based version. An Asustek spokesman didn't respond to a request for comment.
Dell Inc. has been customizing Android software for a range of devices it may introduce in the coming year, including a cellphone and pocket-sized computers called mobile Internet devices, said people familiar with the matter. A Dell spokesman declined to comment.
PC makers' interest in Android is partly driven by the desire to maximize income on netbooks, which usually sell for less than $500. Companies like H-P can spend $15 or more per netbook for Windows, cutting into already-thin margins. Another driver is the possibility of offering netbooks at lower prices; industry executives predict that hardware without Microsoft's software could sell for less than $200.
In contrast to Windows, Google doesn't charge for each copy of Android. The Internet giant hopes to justify its development effort by driving more Web use from mobile devices.
A Google spokeswoman said Android was designed to be used in small gadgets like phones and bigger devices like the mini-laptops. "We look forward to seeing what contributions are made and how an open platform spurs innovation," she said.
Market research firm NPD Group Inc. estimates that Windows comes on more than 90% of new netbooks. Microsoft said consumers returned Linux netbooks after discovering the PCs didn't easily work with popular programs and peripherals like printers—a challenge that could also be faced by Android, which is based on the core of Linux.
"With a Linux machine, it's a crapshoot each and every time," said Brad Brooks, a corporate vice president, for Windows consumer product marketing.
People familiar with PC makers' Android projects say they hope that netbooks that use the software would be embraced by cellular carriers, which already use Android for phones. Dell and H-P already sell some netbooks through the carriers, which subsidize them for customers who buy a long-term data plan.
David Young, the president of international business at Borqs Beijing Ltd., a Chinese programming company that customizes Android for phone makers, says he expects Android to make its way into larger devices. He says there is a "convergence" between smart phones and mini-PCs.
The notion of Android-based netbooks also could have sizeable repercussions for chip makers. Intel Corp., which helped popularize the term netbooks, has dominated the category with a microprocessor called Atom that can run software designed for PCs. Android, by contrast, is designed to work on chips that use processor designs licensed by ARM Holdings PLC.
ARM and licensees that make chips for cellphones—including Qualcomm Inc., Texas Instruments Inc. and Freescale Semiconductor Inc.—are betting that Android could help them move those products into the new netbook market, too.
"We have a pretty strong position," said an Intel spokesman. "But we don't take anything for granted." —-- Jessica E. Vascellaro contributed to this article.