Chrome OS will Kick Windows to Curb 'Cause Netbooks Don't Suck

(MoneyWatch)  It looks as though Dell (DELL) tech people ported an early version of Google (GOOG) Chromium OS onto a Dell Mini 10v netbook. I'm sure a lot of people in the industry are going to be going into closets and wailing, because there are many who seriously don't want the entire class of netbook devices to succeed. There's too little money to be made for most, and the prospect of all those people using all that free software off the web is downright scary to vendors. But they're going to have to deal, because netbooks are a whole lot stronger than they want to think, and the prices can't be beat. And some, like Microsoft (MSFT), may find dealing not possible.

Netbook sales numbers speak for themselves, up 264 percent, year over year. According to DisplaySearch, that was $2.2 billion in the second quarter of 2009 alone. It's the only category of portable PC that increased sales and represented 11.7 percent of all portable PC sales. I'd argue that the number is also deceptive because netbooks cost, what, at most half of a notebook or laptop? So the unit volume has to be hitting something closer to 25 percent of all portable PC sales.

There are people who don't like netbooks, like Larry Dignan over on our sister site, ZDNet because he finds the keyboard and screen too small. But he at least acknowledges that there are plenty of people who do like them. I'll speak as a recent buyer. My old laptop was dead and I needed something to take with me over the Thanksgiving weekend. Stopping by a local office supply store, I noticed an Acer for about $300. Small keyboard and screen, sure, but my large hands still fit on, albeit a bit cramped, and I was able to touch type. The screen was small, sure, but it's a whole heck of a lot larger than what you find on a smartphone (as is the keyboard). And I could always plug in a VGA connector from a monitor or a USB keyboard if I absolutely had to stretch out more.

The model I picked up runs a home version of Windows XP with only a gig of RAM and an Intel (INTC) Atom processor. But that was plenty for me to load Microsoft Office Small Business 2009, Picasa for some quick and dirty image photo editing, FeedDemon to check RSS feeds so I could do a couple of blog posts, the ZoneAlarm basic firewall, AVG anti-virus, and a couple of other things. After unloading some preloaded baggage that I didn't need, I still had plenty of hard drive space. Things could have been faster, but were -- and here's the phrase the industry has to learn -- good enough.

The attraction of the netbook is just that: It's good enough for virtually anything you'll want to do and the price is low. And that's why Chrome OS is going to kick the fanny of Microsoft Windows in the long run. It's going to be good enough for most people, because there will be accommodations for doing basic work while not connected to the Internet and the price will make it welcome among hardware vendors, who are, frankly, going to be hard pressed to make their accustomed revenues. Given that most people are going to be using these in cafes or airports or someplace else that will likely have a Wi-Fi signal, even the Internet connection concern starts to vanish.

When that happens, there's going to be tumult worth of a high budget disaster film. Many companies will have to get used to making a whole lot less money than they have in the past, because many consumers will opt for the cheaper systems. Vendors might even offer models with every so slightly larger keyboards and screens to coax those who haven't found netbooks to be satisfying. Because the companies will want and need to maximize their margins, expect they to throw everything possible overboard -- including Windows, if Google could find a way to give users access to Office-type files even when not connected to the Internet.

Image courtesy Acer.