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Has Google Missed Its Window For "ChromeBooks"?

At the recent Web 2.0 conference in San Francisco Google CEO Eric Schmidt seemed to suggest that Chrome-based netbooks wouldn’t be available for holiday shopping (or even before the end of the year). A year ago, however, Google said it was aiming for the “holiday season” with the intended release of the first Chrome-powered machines. (There’s lots of conflicting information around release timing.)

It’s unclear what’s causing the delay but in the intervening year the iPad arrived and the first viable Android tablets are starting to appear, led by the appealing but flawed-and-too-costly Galaxy Tab. There is growing evidence that tablets — the iPad in particular — have taken a real bite out of the netbook market and negatively affected sales. These data argue that when ChromeOS computers finally appear they may find a very different market and struggle to find a consumer audience accordingly.

As an aside there’s been quite a bit of discussion about the relationship between the ChromeOS and Android. It’s somewhat ironic (or perhaps fitting) then that Android-based tablets might participate in the undermining of Chrome-based netbooks.

Interestingly Google previously positioned ChromeOS computers as second or supplemental machines and not a substitute for a more traditional laptop or desktop. This positioning was wise, in my mind, because a browser-based computer where everything is stored “in the cloud” would be undesirable to most people as a primary computer.

This “secondary computer” slot, however, has now been almost entirely usurped by the iPad. It will be a challenge to explain and market “ChromeBooks” to consumers at this point. The Google brand has considerable weight but probably not enough to overcome changed market dynamics.

Consider that the cheapest netbooks, which generally have fairly low customer satisfaction levels, are now uniformly under $300. And today, “Black Friday,” you can buy 15-inch, Windows-7 Acer and Toshiba laptops from BestBuy for under $300 as well.

What this effectively means is that for a Chrome-based netbook to appeal to a large number of consumers it’s going to have to retail for about $250 or less. Price will thus be the determining factor behind whether ChromeBooks succeed or fail in the consumer market. Here’s the logic: If I can get a “full-featured” laptop for about $300 I’m sure as heck not going to buy one that seems to offer fewer capabilities for the same price. Aggressive pricing is part of the reason why the eReader market (Kindle in particular) has survived the iPad.

Given the cannibalization of netbooks and the usurpation of the “second machine” position by the iPad, ChromeOS netbooks could turn out to be a colossal misfire for Google — absent the dramatic pricing I’ve suggested. I could be wrong of course . . .

Regardless, Google could still find potential success in the enterprise with Chrome computers. Corporate IT departments could deploy thousands of low-cost machines that could be updated quickly and cost effectively. That possibility and associated “new thinking” is suggested in a NY Times piece on Chrome:

[Chrome VP Linus] Upson says that 60 percent of businesses could immediately replace their Windows machines with computers running Chrome OS. He also says he hopes it will put corporate systems administrators out of work because software updates will be made automatically over the Web.

Having potentially missed its “window” for ChromeOS netbooks in the consumer market, the enterprise is where Google may now be forced to focus its energies.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

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