Google’s Android May Challenge Microsoft in Portable Computers

Google Inc.’s Android operating system, after making inroads into the mobile-phone market, may be running on portable computers within the next year, challenging the dominance of Microsoft Corp.

Google, which owns the most popular Internet search engine, could use its brand name and community of developers to get the software onto low-cost notebooks, said Ray Valdes, an analyst at Gartner Inc. One chipmaker, Freescale Semiconductor Inc., is already working on designs for an Android computer.

“Android could be a piece of a larger competitive battle between Google and Microsoft,” Valdes said. The San Jose, California-based analyst expects some kind of personal-computer device to use Android in the next 12 to 18 months.

Google is stepping up competition with Microsoft in areas outside of Internet searches, where it commands more than 60 percent of the U.S. market. While Android already battles Microsoft in software for mobile phones, moving into PCs would encroach onto its rival’s home turf. Microsoft has more than 90 percent of the operating-system market for PCs.

Google, based in Mountain View, California, rose $10.45, or 3.1 percent, to $353.11 yesterday in Nasdaq Stock Market trading. The shares tumbled 56 percent last year. Microsoft, which dropped 45 percent in 2008, climbed 3 cents to $18.12.

Open System

Google won’t say if it plans to promote Android as a computer system. It’s an open platform, so companies can use it how they like, said company spokeswoman Carolyn Penner.

“Anyone can take the Android platform and add code or download it to create a mobile device without restrictions,” she said in an e-mail.

So-called netbooks, also known as mini-notebooks, represent the fastest-growing part of the PC industry. The size of the market will double this year, while traditional notebook sales grow just 1.2 percent, Goldman Sachs Group Inc. estimates.

The devices are about the size of a large book, with screens 7 inches (17.8 centimeters) to 12 inches wide. They typically cost less than $400, attracting buyers in developing countries -- as well as U.S. shoppers adding a second or third PC.

Freescale worked with Taiwan’s Pegatron Corp., the manufacturing arm of Asustek Computer Inc., to create a netbook design that can use Android. Freescale expects to be producing chips for the device in large quantities by the second quarter.

Market Leaders

Hewlett-Packard Co. and Dell Inc., the two biggest PC makers, both introduced mini-notebook models last year. Hewlett- Packard spokeswoman Marlene Somsak declined to comment on the possibility of using Android. Dell spokesman David Frink declined to comment. Stella Chou, a spokeswoman for Acer Inc., the world’s third-largest computer maker, also wouldn’t comment on whether the company has any plans to use Android.

Google started Android in 2007 as part of an industry effort to create a free software system for phones. Based on the Linux operating system, Android is open to any programmer who wants to develop features for it. T-Mobile USA Inc., the fourth- biggest wireless carrier in the U.S., offers an Android phone called the G1.

Linux accounted for about 15 percent of the mini-notebook market in the fourth quarter, compared with 85 percent for Microsoft’s Windows, according to Gartner. For laptops in general, Windows had 95 percent of the market last year, while Linux had less than 1 percent.

Tweaking Android to run on bigger devices is clearly possible, given how other Linux systems have succeeded, said Neil Mawston, an analyst with Strategy Analytics Ltd. in Milton Keynes, England.

Meeting in Middle

“You’ve got Microsoft starting out in bigger devices and moving into smaller devices,” Mawston said. “Google is, in many ways, moving in the opposite direction.”

Microsoft, the world’s largest software maker, says it isn’t concerned about losing ground.

“Customers are overwhelmingly choosing Windows on small notebook PCs,” the Redmond, Washington-based company said in a statement. “Windows is familiar and intuitive, it works with more software and hardware than any other platform, and it offers a level of value you just can’t get anywhere else.”

Android still has to establish itself on mobile phones. The G1 was released less than five months ago and hasn’t shown that it can take significant market share from Research In Motion Ltd.’s BlackBerry and Apple Inc.’s iPhone.

“Their first priority is to build a community of Android- powered mobile phones,” said Avi Greengart, an analyst with Current Analysis Inc. in Sterling, Virginia. “This is the market that Google wants to use, have access to.”

No Buzz?

Ross Rubin, an analyst with NPD Group Inc., doesn’t see Android on netbooks any time soon. The buzz surrounding the G1 may not extend to computers, he said.

To get a foothold in computer operating systems, Google may need to get a bigger share of the market for business programs. While Google offers word processors, spreadsheet programs and other business applications online, it hasn’t made much of a dent yet in the dominance of Microsoft’s Office software.

If those programs replace Windows-backed applications, then an Android netbook will have a better chance to succeed, said Leslie Fiering, a Gartner analyst in San Jose. Google could then parlay that to reach users of regular computers.

“They have to make a beachhead on their smaller devices before they have shot to really take hold in the larger devices,” Fiering said.