Google Counterpunches Microsoft

"Ode to a Tiny Giant"

Market pressures mingle;
Born from old and new combined:
The H-P netbook?

-- Anders Bylund, five seconds ago

The Android platform is more than just an operating system for smartphones. Hewlett-Packard (NYSE: HPQ  ) could be the first major system builder to mold a portable computer around Android.

Microsoft (Nasdaq: MSFT  ) had better take Android seriously. The hottest new trend in personal computers is the netbook. According to researcher IDC, about 20 million diminutive computers are expected to ship this year. That's double last year's netbook market, thanks to a confluence of factors:

  • At less than $500 for a complete system, a netbook is easy on the wallet -- which is very attractive to Joe the Plumber in this global financial crisis.
  • Computer hardware has become so powerful that today's low-end mobile chips from Intel (Nasdaq: INTC  ) , Advanced Micro Devices (NYSE: AMD  ) , or even ARM Holdings (Nasdaq: ARMH  ) can handle the simple applications we use the most: Web browsing, email, the occasional text document, and simple but addictive games.
  • Netbooks fall in a nice consumer niche. Their capabilities are between the bulky, more powerful desktop or notebook systems and the extremely portable Apple (Nasdaq: AAPL  ) iPhone and its smartphone brethren.

Clearly, Microsoft would like to transfer the stranglehold it has on operating systems for traditional consumer-level computers onto this booming usurper. Right now, Windows-based netbooks dominate the market. However, transferring their operating system dominance in traditional PCs over to netbooks has proven more difficult than expected. Linux is making inroads via netbooks from Acer, Asus, and HP.

And now, HP is thinking about moving Google's (Nasdaq: GOOG  ) Android platform into the netbook space. Android marries the highly customizable Linux environment to mobility-friendly extensions like high-speed 3G mobile networking and a modern security model that separates various functions into separate virtual machines.

If HP goes live with Android netbooks, that would be huge for the Android platform and its numerous hardware and software partners like ARM and Qualcomm (Nasdaq: QCOM  ) . It would also be a big minus for Microsoft.

Marrying smartphone software to notebook hardware could throw gasoline on the netbook fire. Mr. Softy may have to adapt by making a hybrid out of Windows Mobile and plain old Windows -- at a minimum it forces Microsoft to take the market seriously and ship an entry-level Windows 7 system that's not too bloated for the tiny resources netbooks contain. While Android might present a small threat to Microsoft's immediate future, it's a foothold for Google to compete head-to-head with Microsoft in the operating system space.

The next computer you buy might be small, hyper-connected, and bristling with Androids. Google's taking the fight to Microsoft's bread and butter.

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Google is a Motley Fool Rule Breakers recommendation. Apple and ARM Holdings are Stock Advisor picks. Intel is an Inside Value selection, and the Fool owns shares of and has written covered calls on Intel. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. He rejoices in National History Month every year. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (27) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 01, 2009, at 6:51 PM, Brettze wrote:

    it would be hard to compete against Windows due to the long standing familarity with "ergonmmics" of the OS. everyone is accustomed to what Windows typically has to offer , but will most be willing to relearn a new OS like Androids with its own "placemats". The menus and whatmascallits will be different in feelings and navigations.. I am sure the younger people would be readily adaptable to anything new, but the older generations will likely to stick with Windows and its old familiarities. Like our older generations still stubbornly stick with fascimile machines and grudingly relearn the email machines.

  • Report this Comment On April 01, 2009, at 6:52 PM, Brettze wrote:

    Look at IBM legacy mainframes, they still lives on because we are stuck with them with the old programmings that we couldnt move to Windows and yet worse Androids, forgert it!

  • Report this Comment On April 01, 2009, at 6:55 PM, Brettze wrote:

    If Androids succeeded in grabbing market share, that may be good but Microsoft will continue to evolve and clutch controls over as much markets as possible and stretching the life of Windows and Office among others. IBM is still doing a lot of computer business even after spawning PC to Intel and Microsoft through licensings. There is still too many people still dependent on Window landscapes to consider pulling up and move to Androids.

  • Report this Comment On April 01, 2009, at 6:58 PM, Brettze wrote:

    Androids will probably at best just expands the computer horizons to more mutlple applications that Windows will prove too insuitable to use with. What applications? It can be communications, GPS, games, electronic commerce, knowledge access, networking people, etc. Windows will be mainly sit down applications without much functional mobilities.

  • Report this Comment On April 01, 2009, at 6:59 PM, Brettze wrote:

    IBM will probably take over Microsoft after it is seen that Mcrosoft has hit the saturation points. Yet, it will be a profitable acqusiton with IBM far superior marketabiliites over Microsoft.

  • Report this Comment On April 01, 2009, at 7:01 PM, Brettze wrote:

    Will Androids be bigger than Windows? Quite possiblly!! in 10-15 years. We will be doing 64 bit applications with Androids so complex that we will allow Androids do the most of thinkings for us.

  • Report this Comment On April 01, 2009, at 7:02 PM, juliehowe wrote:

    I don't see that Google's Android will be a serious threat to Microsoft. Microsoft Office, Microsoft Mobile apps, are a significant part of the computer and wireless market, and you can't run them under Android.

    Google/T-Mobile released a junk mobile phone (the G1) that should have never been put on the market in the first place. It wasn't ready for prime time, and the only thing that has made the G1 worth more than a paperweight is the creative minds behind the average Joes who are writing Android programs and then uploading them to the G1 marketplace. This is the only potential saving grace for the Android - real people are writing device-specific programs in the Android programming language.

    For instance, the camera installed on the G1 sucks. I've had throwaway prepaid cell phones with better cameras. Not long ago, some brilliant guy wrote a simple program that fixed all of the problems with the G1 camera. I am genuinely impressed with the brain power that I see working behind the scenes tinkering under the hood of the G1 and finding new ways to hack into the Android system, regular folks who don't work for T-Mobile, Google or the mobile phone manufacturers.

  • Report this Comment On April 01, 2009, at 7:03 PM, Brettze wrote:

    Androids will probably be wireless intensive that wireless transmitters will be everywhere. Everyone will be knowing where everyone is or where things are all the times. We will become half robots!!

  • Report this Comment On April 01, 2009, at 7:06 PM, Brettze wrote:

    We used to think MS DOS and Windows 3.1 sucked. Then came Windows 95 and the rest is history.. I expect Androids to be stumbling along a bit before finally taking off. My reasonings goes that Windows is already straitjacketed as far as newer techologicla potentials goes.. Windows is basically a hairball as Sun Micro's Mcnealy liked to call it. I cant agree with him more. Windows started on MS DOs and its stupid 640K RAM.. Windows is already doomed to flatlinings..

  • Report this Comment On April 01, 2009, at 7:06 PM, Brettze wrote:

    The key is hardware management and lightning responses .. Windows just cannot do that.. never could!

  • Report this Comment On April 01, 2009, at 7:08 PM, Brettze wrote:

    It is similar to stem cells,, Once you start it, there is no turn back and you will get what you wished you hadnt... too late, buster!

  • Report this Comment On April 01, 2009, at 7:08 PM, juliehowe wrote:

    Brettze,

    Do you actually know anything about the Google Android programming language or are you just smoking crack?

  • Report this Comment On April 01, 2009, at 7:10 PM, Brettze wrote:

    Remember IBM tried to beat Microsoft with Warp OS . Warp OS still needs MS Dos to piggy back on. Google is coming out with its own OS the Androids without a code line of MS Dos., I guess. If not, then it will be a different story.

  • Report this Comment On April 01, 2009, at 7:11 PM, Brettze wrote:

    all kinds of analysts are smoking dope. Some smoke oil and gasoline. Some burn firewood.. So what is your point, punk?

  • Report this Comment On April 01, 2009, at 7:12 PM, Brettze wrote:

    What is basically wrong with you is that you think you know what you are talking aobut but not me... Move over, pighead!

  • Report this Comment On April 01, 2009, at 7:15 PM, Brettze wrote:

    I have fairly clear ideas of the directions that Google is purusiing.. I dont care about the programming bugs and stuff. I care more about what Google is trying to sell.. I am looking at the possiblities in fufute applications that will be spawned by Google.. I also thought that Google will take better advantage of wireless technolgies that Microsoft is not "agile enough" with.due to the inherrent bloatness of Windows and applications associated with them. So you please shu t up and read everybody's. Give everyone a fair chance to stand on the damn floor.

  • Report this Comment On April 01, 2009, at 7:18 PM, Brettze wrote:

    Google has been selling advertisment since day one and I know that it is not sustainable. Google has to move on new arenas of technolgical opporunities. I am not saying that Microsoft will stand down like a patty. Microsoft will fight , but with Windows and its hairballs and crashes. Not to mention hackers. Cloud computing is coming on fast. Communication towers will be multiplying like weeds to a point that you will have your own on your front door. and probably under your bed, as well.

  • Report this Comment On April 01, 2009, at 7:23 PM, Brettze wrote:

    What is basically wrong with our stock market can stem mainly from practicaly everyone watiing for the oil comeback... Oil will never come back!! come to think of that... I just knew that ... Oil is dead long dead!@

  • Report this Comment On April 01, 2009, at 7:23 PM, Brettze wrote:

    as dead as horse manure from the horse buggy days..

  • Report this Comment On April 01, 2009, at 7:23 PM, Brettze wrote:

    as dead as horse manure from the horse buggy days!!

  • Report this Comment On April 01, 2009, at 7:24 PM, Brettze wrote:

    Solar is coming, yet everyone is so blinded that they are keeping bumping heads into eachothers...

  • Report this Comment On April 01, 2009, at 7:24 PM, Brettze wrote:

    you now tell me who is smoking dope?? YOU!!!!!!!!!!!!!!!

  • Report this Comment On April 01, 2009, at 7:25 PM, Brettze wrote:

    Just quit burning firewood, morons!

  • Report this Comment On April 01, 2009, at 7:25 PM, Brettze wrote:

    and charcoal with lighter fluid, mornons!

  • Report this Comment On April 01, 2009, at 7:26 PM, Brettze wrote:

    gagging on cigarettees!!

  • Report this Comment On April 01, 2009, at 7:35 PM, Roxx wrote:

    Nice to see there is so much competition in the OS space. Someone should tell the EU.

    rxx

  • Report this Comment On April 02, 2009, at 7:09 AM, arcotn wrote:

    Microsoft is putting lots of money into its cloud offering Azure. I can see a lightweight windows 7 connected to azure offerings being a very attractive combo for netbooks. Also, I have been using windows 7 beta and it is fantastic at resource management, and not slow like Vista. Mark Russinovich is behind some of Windows 7 internals, and for those who have seen his work know he is not one for bloated/slow software. MSFT has been focussed on OS optimization lately.

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