Stepping back for a second, this in-house hardware is, of course, what Apple and BlackBerry have been doing all along, since their very first days in the business. Google and Microsoft were the ones who worked with hardware OEMs as in the Windows PC days, having the likes of Samsung and Acer do the hardware.
Microsoft has never fully denied that it's working on its own smartphone. Despite its chummy relationship with Nokia, rumors have been abuzz for approximately one year, that Microsoft too will start making its own smartphones.
Remember how much of a surprise Microsoft's Surface tablet was when it was introduced in June last year? Nothing about that product had leaked beforehand. Of course, unless Microsoft outright acquires Nokia, it will soon launch its own Surface phone as well.
This raises at least two questions:
1. If Google makes its own Chrome OS smartphones, would that also mean that Samsung and all the others are excluded
Of course not! Google would love as many hardware partners as possible, just like Chrome OS laptop and desktop PCs. What Google doesn't want is software fragmentation. Putting Chrome OS on the phone solves this problem.
Samsung can play, but with a lot less power than it has in the Android world. It's like being back making Windows PCs again. Or, for that matter, Chrome OS PCs.
Nothing wrong with that, of course. Perhaps that's the way it should be. It may be the only form of stable equilibrium in the OS business.
2. What about Android
Let me be clear: I am not saying that Google will abandon Android. Why would it? There is no upside in that. What Google will do is shift the emphasis to a much better operating system -- Chrome OS -- that will also provide 100% consistency from device to device.
Google will continue to develop Android, both for itself in the form of Nexus and other Nexus-equivalent devices. It will work with partners, such as Samsung and Facebook. Yet others, such as Amazon, will completely customize Android beyond recognition. In other words, just like today.
So what? Why should we care?
When Google adds Chrome OS to its tablet and smartphone repertoire, its market power increases materially. Chrome OS is fundamentally a better OS than Android -- more elegant, more secure and faster. Beyond the strict technical merits, it will also enable Google to control a 100% consistent experience across all devices, regardless of Samsung's or Verizon's wishes.
Google's upcoming moves to gradually replace Android with Chrome OS is more than a watershed in the mobile computing market. It's a Tsunami.
At the time of publication the author was longGOOG, AAPL, BBRY, NOK and FB.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.