Alphabet's (GOOGL) Plans to Create Android PCs Should Make Microsoft (MSFT) a Little Nervous - TheStreet

This article originally appeared on Real Money on Sept. 28, 2016.

Four years after Microsoft (MSFT) - Get Report first tried to give the world unified PC/mobile operating systems via the dual fiascoes known as Windows 8 and Windows RT, Alphabet's (GOOGL) - Get ReportGoogle appears set to take its own stab at the concept. And there are reasons to think the company will see a measure of success.

Citing "two independent and reliable sources," Android Police reports Google plans to launch a notebook in the third quarter of 2017 that will likely be the first new device to showcase Andromeda, a version of Android that will integrate many features associated with Google's Chrome OS PC operating system.

The notebook will reportedly be called the Pixel 3, and carry a $788 price. Its feature set reportedly include a 12.3-inch display, an Intel (INTC) - Get Reportprocessor, a glass trackpad, a tablet mode and stylus support.

9to5 Google also reports the Pixel 3 is being prepped, while adding China's Huawei plans to launch a tablet -- likely under Google's Nexus brand -- that runs Andromeda. The site thinks the Huawei tablet will arrive probably arrive sooner than the third quarter of 2017.

The reports come 11 months after The Wall Street Journal reported Google "plans to fold" Chrome OS into Android in 2017, and had spent two years on the effort. It added "an early version" of the merged OS is expected to be shown off in 2016.

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This cryptic tweet from Android chief Hiroshi Lockheimer has fueled speculation that an early version of Andromeda will be revealed at a Google event scheduled for Oct. 4. The event is rumored to feature the unveiling of HTC-manufactured Pixel phones, along with a new Chromecast streaming stick and a virtual reality headset based on the company's Daydream platform.

Google has already begun making Android apps available on Chrome OS in the Google Play store. However, Andromeda would go much further, effectively replacing Chrome OS with a version of Android that's well-suited to being used with a keyboard and mouse.

With Android running on close to 85% of the 1.4 billion-plus smartphones that are sold annually, as well as quite a few tablets, Android PCs would present PC buyers with an interface and apps that many of them are quite familiar with.

In addition, Google could revamp the apps and cloud services it pre-installs on Android phones and tablets so that they sync with similar apps and services on Android PCs, and make it easy for third-party developers to do the same for their apps. And the availability of such PCs would give developers a strong incentive to write Android apps that work well with a keyboard and mouse, rather than just a person's fingers.

Microsoft will doubtlessly be paying close attention. The software giant has already moved to fuse its PC and mobile operating systems -- the company's smartphone OS is no longer known as Windows Phone, but Windows 10 mobile, and developers can create "universal" Metro-style apps that (with some tweaks) can run across PCs, tablets, phones and Xboxes.

But Windows 10 Mobile's minimal smartphone share limits the practical value of these efforts, and it's hard to ignore the fact that much of the time spent on Windows PCs doesn't involve using Metro-style apps, but the traditional desktop interface.

Chrome OS has already gained a following in the education market, and to some extent in the low-end consumer notebook market. Andromeda could allow Google to build on its gains in those markets, as well as help Android devices grab a chunk of the market for PC/tablet "convertibles," where Microsoft's Surface line is a big player.

At the same time, business PC buyers, who have made big investments in Windows hardware and software, and who tend to be cautious about embracing brand-new software platforms, are likely to be wary about buying Android PCs.

Regardless, if Google can execute properly and win the support of big-name Android developers, Android PCs present a major opportunity. And while the OS itself will presumably be given away for free, having Google Search, YouTube, Google Play and other Google apps and services built into tens of hundreds of millions of future PCs could prove quite lucrative.