Chrome: Google's Other Operating System Debuts

Google's (GOOG) executives have long enjoyed ribbing Microsoft (MSFT) as bloated, slow, and out of touch with computer trends. So there must be a few smirks at Microsoft's headquarters: Google's first, long-delayed Chromebooks are about to arrive in a world that's moved on without them.

Google laid out its Chromebook vision two years ago: a new type of laptop that revolved around the Web. It would run on a stripped-down operating system known as Chrome—imagine a Web browser that isn't on your computer's desktop, it is your computer's desktop. Chromebooks would turn on in seconds and would let users flit around the Web and store things such as photos and documents via Flickr, Dropbox, and other online services. The idea was to wean people away from storing files directly on their computers and managing files and applications on the desktop screen so familiar to anyone who's used a PC or a Mac. The cloud had arrived and deserved its own computer.

The initial batch of Chromebooks, which are shipping on June 15, lives up to that vision. These machines start up fast (eight seconds). Once people log in with their Google credentials—the same used for Gmail—they arrive at a home page on the Chrome Web browser and off they go. That's the gist of the Chromebook experience.

Samsung and Acer have built the first models, which will sell for about $430 for Wi-Fi-only systems and $500 for versions that can also connect to Verizon's 3G wireless network. (As with its mobile operating system, Android, Google doesn't charge a licensing fee for Chrome.) Consumers in the U.S. can buy them through (AMZN) and (BBY); Europeans will be able to get them in the coming months. Google also has a monthly subscription program for businesses and schools, leasing Chromebooks for $28 per employee and $20 per student.

Like smartphone sellers, Google has created an online app store for Chrome—both for Chromebooks and Chrome browsers on regular PCs. Users won't see familiar desktop software like TurboTax, Photoshop, or Microsoft Office, but they'll be able to get H&R Block At Home, BeFunky Photo Editor, and Google Docs.

On a Chromebook, you need to be online to run any of these applications. "That really is the big problem," says Tim Bajarin, president of analyst firm Creative Strategies. "The reality is that you're not always going to be in a place where you're connected." Later this summer, Google plans to offer versions of Gmail and Google Calendar that will work on a Chromebook even when it's offline. The company will also help developers similarly adjust their apps, says Google spokesperson Lily Lin.

Google has decided to add more traditional file management tools as well. For example, users will be able to open and save music, photos, and other files on SD cards and USB sticks, just not on the laptops' hard drives.

Google once planned to ship the Chromebooks in 2010. They would have seemed like a breath of fresh air then. Over the past year, though, tablets and smartphones have continued to surge. These devices deliver the same basic experience as the Chromebooks since they too tend to revolve around the Web. But there's more device variety in the tablet and smartphone markets, and they tend to have livelier app stores, including Google's own Android marketplace.

In the past couple of weeks, Microsoft and Apple (AAPL) have shown off revamped versions of their computing operating systems. Microsoft's Windows 8 (due next year) has a radical interface that resembles its smartphone software and is integrated with Facebook and other Web services. Apple's new Lion version of OS X will link to iPhones and iPads through cloud-based services. Both these operating systems will provide access to the cloud without the big tradeoffs of Chrome, says IDC analyst Al Hilwa. "It seems to me that the Chromebooks are more of a concept," he says. "Google is trying to showcase an ideal of what life might be like if everything depended on the cloud."

The bottom line: Google's simple, inexpensive Chromebook showcases cloud computing—but may be too stripped-down, and late, to go mainstream.

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