For a keyboard smartphone, this could be Google's ultimate BlackBerry-killer. Remember, until a couple of years ago, BlackBerry was not touchscreen, and that's what most people are still happy using around the world for their BlackBerrys. It could be made uniquely cheaply, even more so without that touchscreen.
Speaking of cheaply, this leads us to a core question in this argument: Why bother expanding Chrome OS to tablets and smartphones to begin with?
The answer is found inside the realm of simplicity, security and cost. If you think Android is cheap to make today, that's true, but it could be much cheaper still, and this is what counts for billions of people around the world.
Chrome OS could have lower hardware requirements to run well, especially on such a smaller screen. There is less need for local storage. Instead of 16 or 32 gigs on board, 2 or 4 gigs might be more than plenty.It's well-known that security is superior on Chrome OS, with no local app installs. Some other people still are uncomfortable installing, updating and monitoring applications -- including troubleshooting those that behave badly, take up too many resources, or pose potential security risks. Apart from the interface issues, what would Chrome OS need to change to become optimized for tablets, let alone smartphones? The one thing I see is local storage for media. If you are carrying a Chromebook today, you most likely have your podcasts, music and TV/movie shows on your smartphone or tablet, such as an iPhone or iPad. You need local storage to keep you happy listening/watching podcasts at the gym or when you are on the plane or on the subway, just to mention three of the critical-use cases. This would be completely new for Chrome OS, but it remains still today an ongoing challenge for Android as well, in comparison to iTunes and how it works with iOS devices. I don't know if -- let alone when -- Google would be in a position to launch these Chrome OS-inclusive tablets and/or smartphones. What is clear is that Android has hit its product definition in terms of already being offered in the two basic form factors for which it is optimized: smartphones and tablets. Chrome OS is only on PCs right now, but could in principle end up being larger than Android if Google expanded it to smartphones and tablets as I describe above.