Android to Power Google Notebook

Zacks

Internet search giant Google Inc. (GOOG) announced the launch of a notebook, which will be powered by its mobile OS Android in the third quarter of fiscal 2013.

The new laptop will run on Google’s flagship mobile Android OS and may come with a touchscreen. Users will be able to access all apps available in the Android app market through their laptop or ‘Androidbook’.

In Feb 2013, Google started shipping the Chromebook Pixel priced at $1,299. This version comes with a high-resolution touchscreen, Intel (INTC) Core i5 processor and built-in 4G LTE cellular connectivity through Verizon (VZ) wireless network. Earlier, in 2011, Google launched Chromebook featuring the Google Chrome OS.

According to DigiTimes, Google has managed to sell 500,000 Chromebooks to date and expects to cross the 1 million mark by the end of 2013. Although Google is looking to get its devices into the maximum number of hands on the strength of the Chrome OS, its plans are clearly at an early stage compared to Microsoft (MSFT), which sold 40 million Windows 8 licenses worldwide in the very first month.

IDC estimates that tablet shipments may surpass desktops in 2013 and notebooks in 2014. Total tablet shipments may touch 190 million units, increasing at a compounded annual growth rate (CAGR) of 48.7%. Currently, all PC makers are battling the slump in the PC market caused by the sluggish economy. In addition, the popularity of tablets running iOS and Android are cannibalizing PC market sales, further deteriorating the scenario.

Thus, Chromebook’s slow success may have prompted Google to launch another laptop based on its already-popular Android OS. Pricing will of course determine its success, since Amazon and Asian players have their grip on the low end and Apple on the high end..

In the fourth quarter of fiscal 2012, Google’s gross revenue (including TAC) touched a record $14.4 billion, representing sequential and year-over-year increases of 2.3% and 36.2%, respectively. Excluding the $1.5 billion contribution from Motorola, revenues were up 21.9% from the year-ago quarter.

Google has a Zacks Rank #3 (Hold).

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