HP Android: Are the OS Wars About to Reignite?

By Rob Enderle March 31, 2009

We haven’t had a real operating system (OS) war since IBM and Microsoft tangled in the early ‘90s. Because Apple remained vertically integrated though, that match-up was uneven and really never put DOS, or later Windows, at much risk. OS/2 largely failed because IBM was seen as more of a competitor to the other PC makers than a partner, even though that OS was largely what Windows NT became years later.

Now we have Google about to make a run at Microsoft, and while they don’t appear to be directly targeting Apple, that firm could be collateral damage in this war as the least well-connected of the three contenders. With this apparent leak of an HP effort (coupled with an Asustek effort), there appears to be reviews going on with Android by all of the major OEMs, and Android, which is basically desktop Linux done properly, could be a contender.

With that in mind, let’s talk about the coming OS war.

Timing and Approach

By most estimates, the timing for the arrival of the desktop version of Android is estimated to be about the second half of 2010, or a little more than a year out. Until then, we will only see the cell phone version of the product, as Google approaches the market in the exact opposite direction that Apple and Microsoft approached it: Leading with Smartphones and following with desktops.

Apple iPhone 3G It is interesting to note that the idea of a touch interface really got traction with the iPhone, and that this interface has received more attention than the OSX desktop version that the iPhone was derived from. Microsoft came at the market first but clearly stared with a Windows UI-like user interface and the result wasn’t near as compelling as what Apple did. Google, learning from both, apparently is starting with the cell phone interface and taking it to the desktop.

In addition, the idea of an application store, which has been incredibly popular with iPhone users, is core to the Android experience as well. Google went farther to assure quality and while the company currently has fewer applications, they also have far less junk. Interestingly enough, at the last count, it appears that Google and Apple have similar numbers of developers at the moment, even though Apple has a vastly larger installed base.

Forcing Cannibalization

The problem for both Apple and Microsoft is that Google doesn’t care about cannibalizing existing revenues. They largely make their money off of search advertising and all they really want is to control the browser well, and deny Microsoft revenue, which is a big part of the firm’s overall goal in life. As a result, Google can, and likely will, give the OS away for free along with a set of core applications. This targets three of Microsoft’s five keystone products and two of Apple’s three. Microsoft’s keystone products are Windows, IE, Office, Windows Server, and Xbox. Apple’s three are the Mac+MacOS, iPod+iTunes, and iPhone + App Store.

A keystone product is one that has a massive importance to the revenue, profit and other products in the firm. Thanks to Steve Jobs’ cutbacks when he took over, mostly keystone products are what Apple has left. Microsoft has a vastly broader portfolio, but what they have largely depends on the success of their five keystone products. Lose any of them and they lose a major part of their overall revenue and market.

If Google is able to take a significant position, the word "screwed" comes to mind with respect to both aforementioned companies’ existing revenue streams. If Microsoft loses much of Windows, IE, and Office, Windows Server likely takes a big hit as well, and Apple likely can’t survive on the iPod/iTunes revenue that would be left after a major Google success very well either. Ironically, this is the same kind of choice that Microsoft’s making IE free forced on Netscape back in the times of the browser wars.

OnLive: The Potential Other Shoe

The OnLive offering, basically a high-performance cloud-based console gaming platform that was announced last month, promises to go farther than either Apple or Google have yet gone, but they are clearly within Google’s budget and sights at the moment. Were Google able to provide this level of back-end performance on their, let’s call them Smartclient, devices, we could have what amounts to a performance game changer and the potential for a broad-based PC revolution. We know that the cloud will play a huge role in the next computing wave and OnLive represents the cloud on steroids.

Assuming OnLive performs as promised, if Google were to buy or emulate OnLive across their platform it would give both Apple and Microsoft cold sweats.

Apple and Microsoft’s Difficult Defense

To buy time, both vendors need to widely deploy their next generation products to form a barrier around their respective customer base before the Android platform matures. This means that Windows 7 and Office 2010 need to be well penetrated and that the 3rd generation iPhone (note possibly leaked pictures), Snow Leopard, and the next generation Macs need to be driven into the market aggressively.

Google couldn’t have timed this better because the market really doesn’t want to buy anything at the moment, due to the harsh economic conditions, and this probably won’t improve until about the time the Netbook version of Android arrives at retail. In addition, Office 2010 comes late and will likely arrive on top of the Android release, making it virtually impossible to turn it into a strong firewall against competitive migrations for Microsoft.

Fortunately for both companies, Google doesn’t exactly have a reputation for excellence in anything but search and odds favor the fact they will fumble out of the gate with this new platform as a result. But, they could also get it right enough, and the Android G1 wasn’t bad for what was basically a beta device.

Wrapping Up

We haven’t seen an OS war for nearly 20 years, and are long overdue for one. Much like the last computing cycle, the market appears ready for a change, and the current economic conditions should minimize the purchases of both Apple and Microsoft’s new offerings, setting the stage for a potentially disruptive Google coup. However, it is hard to believe both Apple and Microsoft don’t see this coming: The only issue is whether either will be able to do much of anything to stop it.

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