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Chrome OS hardware subsidy?

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Google has been in talks with at least one hardware manufacturer about a Google-branded Chrome OS netbook, according to internet rumor. And it only stands to reason. We now have the Googlephone. Why not the Googlenetbook?

Citing multiple unnamed sources, TechCrunch says that the Mountain View Chocolate Factory has sent an RFP, or "request for proposal," to the mystery manufacturer and that the two have actually discussed building a Google-branded Chrome OS device.

According to the report, Google "intends" to sell the device directly to consumers, tie it to "one or more" wireless carriers, and somehow subsidize it. The implication is that the carriers will subsidize. But as with the imminent Googlephone, we can't help wonder if Google intends to subsidize its own hardware in an effort to generate ad dollars.

Google announced its browser-centric Chrome OS this past summer, and last month it unveiled an early version of the ostensible operating system, which will limit all applications and all data to a browser - Google's browser.

What's more, the OS will only be compatible with certain hardware. For instance, it will only run on a flash drives, and not traditional hard drives. Google says it want to improve boottimes. By shunning hard drives is also a way keeping your data on Google's servers, which it can be used to target ads.

Google has said it's working with twelve hardware manufacturers on commercial devices based on the OS, including Acer, Asus, Freescale, Hewlett-Packard, Lenovo, Qualcomm, Texas Instruments, and Toshiba. But clearly, Google is calling the shots - with both software and hardware.

"We are working on the Chrome OS image - the software - but it addition to that, we are actually going to and working with partners to specify components at the hardware level. We really want software to understand the underlying hardware so we can make it much faster and more secure. It's an important part of what we're trying to do," Google vp of product management Sundar Pichai has said.

"As a consumer, you cannot download the Chrome OS on your current machines. You will have to go and buy a Chrome OS on the market."

In light of Google's recent admission that it has built its very own Googlephone - and press reports that it intends to sell the thing itself - it's hardly a stretch to say that Google intends to sell its very own Googlenetbook.

The company has said that the first Chrome OS devices will arrive at the end of next year, and TechCrunch says Google "seems to be aiming" for a Googlenetbook debut at around the same time.

Google has built Chrome OS for both x86 and ARM processors, and the question tossed around the net this morning feverishly asks which chip will turn up in a Google-branded device. But the bigger question is how low Google intends to drive the price of its hardware devices. Is it the carriers who will subsidize such Googlemachines? Or will Google itself do the subsidizing? Or both?

And if it's both, how can Google's other partners hope to compete?

Are these partners content with getting an operating system for free? Or is Google promising carriers - and perhaps even hardware manufacturers - a cut of the ad revenue generated by machines running Google software? Is that how Mountain View proposes to keep everyone happy as it attempts to cannibalize the existing market? Will partners get a cut even when the Google brand isn't on the device?

Google has said it has no intention of competing with its own partners. But it appears to be doing so - not only with Android but perhaps Chrome OS as well. How can it possibly keep everyone happy? Unless everyone gets a cut? Is Google aiming for a world where online ads pay for your hardware in much the same way they pay for your search engine? ®

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