A couple of days ago, Google announced they’d be releasing a lightweight operating system called Chrome OS in 2010. The Blogosphere has spent the last few days speculating on how Chrome OS will compare to Windows in a head to head fight, and whether it will take significant market share from Microsoft Windows in laptops and desktops. I think that’s missing a lot of the point. For what it’s worth, here’s my uninformed speculation.

• When it comes to browsers or operating systems, I don’t think Google care very much about market share of particular products, but they do care about the underlying technologies. The  Chrome browser has a relatively small market share, but it has had a disproportionate effect on the direction of browser development as a whole. There’s an arms race in areas such as JavaScript performance and HTML5 support, and the Chrome browser gives Google a tool to use to push the technologies it favours. Sure, Google would like you to use the Chrome browser, but if you choose another modern browser with similar features, such as Firefox 3.5 or Safari 4.0, I think Google still count that as a win. A similar argument also applies to iPhone vs Google Android.
• A small percentage of marketshare in either browsers or operating systems is still a big number of people. If Chrome OS gets 5% of the operating system market, and Google has say 200 people working on it, I bet that looks like a good investment.
• I’m often faced with casual computer users with old PC hardware. Windows is running like a dog on their system, and often they don’t have Windows restore media for a clean install. Many of these people just about accessing their email, Facebook and some online shopping, not video editing or photo editing. A web browser is enough for them. Currently their best option is Ubuntu (which is still quite heavyweight for old hardware), or some mini Linux distribution. These do work, but there are always some silly issues that spoil the experience. No doubt Chrome OS will have a cleaner interface, will be faster on old hardware, will be kept up-to-date without the user intervening (like the Chrome browser), and will be very secure. If old hardware is supported, it will be by far the best option for basic web users with old hardware.
• More and more people have secondary machines in their homes and offices, and while a web browser isn’t the only application they need on their main system, in many cases it’s more than enough on a secondary device, as long as the price reflects the limitations. Michael Arrington’s Crunchpad is a great example of a device that embraces this.
• In response to Linux netbooks, Microsoft have been selling Windows XP at a big discount to PC manufacturers, and have been quite liberal about the hardware specifications of this hardware. With Windows 7, it appeared that Microsoft wanted to tighten up the restrictions on netbooks, and sell the operating system at less of a discount. Chrome OS gives PC manufacturers a club to beat Microsoft with, and may well force Microsoft to discount Windows 7 for netbooks to a greater extent than they planned. I can’t see Google losing any sleep over this.
• The ARM compatibility of Chrome OS is a very big deal. ARM SoC (System on a Chip) are very efficient in terms of power, and are also very cheap. Sub £100 ($150) smartbooks (like netbooks, but not Intel based processors) suddenly look realistic. 1Gb of RAM, 4Gb of flash storage,  combined with an ARM chip, is already a very cheap platform, and is only going to get cheaper over time.
• If you can have a modern fast web browser on very cheap and efficient ARM processor, why not embed them in lots more devices, many of which already contain processors and RAM. Manufacturers could very cheaply add Chrome OS to a TV, a PVR, a games console, or a monitor. Spend an extra £20 ($30) on a monitor or TV and get Google Chrome OS builtin. The Nintendo Wii has an optional Opera browser, which is passable, but hardly a great experience, and it presumably wasn’t cheap to develop. Instead, just add a couple of cheap chips and you get a good web experience from Google, with the added bonus that Google look after all the updates and security.

In summary, I think Google aren’t going for Windows or Mac OS X head on, but just want more machines out there running Google friendly modern browsers at a low cost. In many ways, Chrome OS reminds me of Microsoft’s plans for Windows CE a decade ago. CE never really made much progress beyond Windows Mobile devices, but in this new world where the web browser is king, perhaps Chrome OS will have more success.