Google PC rumors heat up again (updated)

Update

Google has spoken, and the rumors were merely that. According to a Google spokesman, the company won’t be releasing a PC, Internet appliance, or web-enabled toaster anytime soon:

“We have many PC partners who serve their markets exceedingly well and we see no need to enter that market,” a Google spokesman told Times Online. “We would rather partner with great companies.”

That should be the definitive word on the topic, at least until the next set of rumors comes along.

Original story

Although not quite the target for rampant rumor-mongering that Apple is, Google still draws its fair share of speculation. The latest new Google product allegedly in the pipeline is the Google PC/Internet Appliance/thingy. The Los Angeles Times is reporting that Google will unveil just such a device at this week’s Consumer Electronics Show in Las Vegas.

According to the paper, Google’s new PC will not run Windows. Rather, it will use an OS created by Google. Pricing is reputed to be in the "very cheap" range, which I’m guessing would put it in the sub-US$300 category. Google has reportedly been in negotiations with Wal-Mart about carrying the device, whatever it may be. That would give Google’s device instant reach.

Google CEO Larry Page is giving a keynote address at CES, and is expected by some to announce the device. (I’ll be at his keynote as part of Ars Technica’s coverage of CES.)

Speculation about Google introducing a PC or Internet Appliance is nothing new. However, the rumors have been growing louder and more persistent over the past few months. In December, one analyst predicted the arrival of "Google Cubes," which would be Google-branded hardware that would function primarily as a media server. That seems outlandish at best.

Looking solely at the possibility of a Google PC, we can make some educated guesses about the nature of such a beast. It would definitely run some flavor of Linux, probably heavily customized. Arguments about whether Linux is "ready for the desktop" aside, it’s a natural as a low-cost (free) OS that can perform all the basic functions that the typical PC user needs. Google could include Firefox with the Google Toolbar preinstalled and could easily tweak one of the IM clients to work with GTalk out of the box.

The bigger question is why Google would want to enter an entirely new market with its own peculiar set of headaches. Although manufacturing, distribution, and even call center/support desk tasks could easily be done by third parties, Google would still need to devote a significant proportion of its resources to a new PC division. Yes, Google sells search appliances for the corporate market, but the company’s core competencies are search, Internet advertising, and software development.

Another concern would have to be consumer acceptance of Linux as an operating system. How many Linspire-branded PCs were returned to Wal-Mart once users booted them up to discover that Windows—with all its familiarity—was nowhere to be found?

Google definitely has the resources to bankroll the launch of a new PC or Internet Appliance along with the name recognition to sell them. However, the desktop operating system market are owned by Microsoft. The chances of a low-cost Google PC making any significant inroads against the >90 percent market share enjoyed by the various flavors of Windows are slim. Google has been able to successfully challenge Microsoft on a number of fronts, but here’s betting that desktop operating systems won’t be one of them.