Google's November Assault on Microsoft and Apple
By Anton Wahlman, Contributor - 09/21/12 - 7:30 AM EDT
NEW YORK (TheStreet) -- It is easy to be blinded by the recent high-profile gadget launches of Microsoft (MSFT) and Apple (AAPL).
Microsoft has shown different versions of Windows 8 for smartphones, tablets and PCs, which it will begin shipping around Oct. 26. Apple delivered the iPhone 5 along with new software for all of its hardware form factors.
Lurking behind the scenes, however, is Google (GOOG), which I believe will unveil a bevy of products to compete very strongly against Microsoft and Apple. I believe these products are likely to be announced as early as October, and would be available in U.S. retail within approximately 30 days thereafter -- basically, by Thanksgiving.
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These products based on Google software will fall into three categories: PCs (laptops and desktops), tablets and smartphones. Let me describe them in turn:
1. PCs
Several PC brands that may be guarding themselves against a consumer and/or enterprise backlash against Windows 8 are likely to start producing Google PCs imminently. Samsung and Acer are already in production, but one can envision others joining this bandwagon.
I view Lenovo, Asus and Dell (Dell) to be the most likely ones, but others are also possibilities, including Hewlett-Packard (HPQ), Sony (SNE) and Toshiba, just to mention a few.
Google offers the simplest possible PC software, especially compared to Microsoft and Apple. With a Google PC, I cannot see a scenario where you would ever be in need of tech support. Basically, it boots up much faster than an Apple iPad and it "just works."
Google laptop and desktop prices are and will be competitive with Windows, which means they are much cheaper than Apple. However, you also have to consider that with a Google PC you don't have to buy any additional software or service/support plans. Your lifetime total cost of ownership, or TCO, will be a lot lower with a Google PC.
So far, Google has not marketed its PCs very well. They only recently started appearing at Best Buy (BBY) and most consumers don't even know that a Google PC exists, let alone why they would be better than Microsoft/Windows and Apple/Mac.
Starting this November, this is likely to change. Market share shifts typically take several years to become material, but I think it will start to become measurable in the months following these imminent launches.
2. Tablets
Android tablets are a dime a dozen, but very few of them run the most recent and by far the best version of the Android operating system, the 4.1.1 version called "Jelly Bean." Starting this November, this will change -- dramatically. The current main 4.1.1 Google tablet offering made by Asus has a small 7-inch screen and no cellular/LTE connectivity.
By November of this year, we should see eight-, nine-, 10- and 11-inch Android tablets running Android 4.1.1 (or higher) and offering cellular/LTE connectivity from a long list of hardware makers. Most likely, they will be offered from most of the following: Samsung, HTC, Sony, Asus, Acer, Lenovo, Huawei and Motorola, which is of course now a division of Google's. Perhaps even others.
Google's value proposition will be that these Android tablets will be offering a more PC-like flexible operating system experience than Apple, on hardware that will be equal to -- or in some cases better than -- Apple, but at prices that almost approach the value offered by Amazon's Kindle tablets. The sheer diversity of form factors offered by these Android tablets will dwarf the offerings from Apple, Microsoft and Apple.
3. Smartphones
The fragmentation among the Android smartphone experiences has become a running joke in the industry, and even society at large. The interface looks different if you're buying a Samsung, HTC, Sony, LG and so forth.
Even worse, the software support for any Android model that hits the market can best be described in one word: orphan. Upgrades are rarely seen, if ever, and if they do show up, they tend to be six to 12 months too late, which is an eternity in the computing world.
In other words, Android fragmentation has become a total catastrophe for Google's ability to compete with Apple and Microsoft in the long term, despite that measured strictly in terms of units shipped -- 500 million or so -- Google is already in the lead. In order for this lead not to collapse in 2013, Google has to change course and right these wrongs.
Come this November, I think we will see the first evidence that Google is fixing the Android problem. The story here is in many ways similar to Google's tablet story.
Whereas in the past most of Google's smartphones were launched running one- to two-year old versions of the Android operating system, this November we should see a more uniform launch of Android 4.1.1 (or newer) smartphones from a long list of hardware makers: Samsung, HTC, Sony, LG, Huawei and Motorola (owned by Google itself), just to mention the more prominent ones.
By Google inducing its hardware makers to launch on the latest version of the Android OS, it will come a lot closer than before to matching the uniformity of the software experience offered by smartphones from Apple and Microsoft.
But that may not be the only benefit and trick of what Google has in mind for its future smartphones:
Whether this November or some time in 2013, Google may dramatically expand its "direct sales" model of both devices and service plans. Consumers can save a lot of money by purchasing a Google Nexus smartphone from Google already today for $349 and using it with an all-you-can-eat SIM card for $30, $45 or $60 per month depending on carrier and features. This can often save a consumer $1,080 over two years compared to a contract-subsidized plan, making for a huge net savings still.
The problem for Google is that today it offers only one phone for these attractive service plans. It's a good phone alright -- the Samsung Galaxy Nexus (GSM global unlocked version) -- but it would be much more attractive to have models in all sorts of sizes and shapes from HTC, Motorola, LG, Sony and others to do the same. This may be what will happen this November.
To summarize, I believe it is likely that Google will launch a broadside worthy of a comprehensive computing portfolio -- PCs, tablets and smartphones -- this October/November that will compete very strongly against the recently upgraded offerings from Microsoft and Apple.
If Google does what I have outlined here in my suspicions and suggestions, it will likely be taking market share on all fronts going into 2013.
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