Netbook doom - Google drops a hammer

The shark's fin has breached the surface. Emphases mine (thanks Andrew):

Google boss backs subsidized Linuxbooks • The Register

Google CEO Eric Schmidt has hinted that his company - or at least its partners - will one day subsidize the purchase of extra-low-cost Linux netbooks in an effort to promote the use of its myriad cloud online services.

"What's particularly interesting about netbooks is the price point," Google's Willy Wonka told a room full of financial types this afternoon at the Morgan Stanley Technology Conference in downtown San Francisco. "Eventually, it will make sense for operators and so forth to subsidize the use of netbooks so they can make services revenue and advertising revenue on the consumption. That's another new model that's coming."

Schmidt called netbooks the "next generation" of the low-cost machines produced by Nicholas Negroponte's One Laptop Per Child (OLPC) initiative. "Products today are not completely done. Things are missing. It's perfectly possible that operating systems that are Linux-based will become a significant player in that space, whereas they have historically not been a significant player in the PC space...

..... Such devices could rule the world, Schmidt said, because cloud online apps are the future. "Cloud computing is one of those changes that are going to happen - regardless of whether or not companies in the ecosystem want it to," he said. "IT systems today are so slow in the way that they evolve...We now have an opportunity to build a whole new generation of applications that cycle much faster.".....

Good reporting to this point, but the Reg is dead wrong with this prediction ...

... If Google taps into this plan, you'd have to assume that Googlicious netbooks will be sold by someone other than Google. As the company has shown with its open-source Android mobile stack, Google prefers to keep the direct-sales biz at arm's length...

Right. And Android has been a great hardware success.

Google will not manufacture, but Google will specify and they will brand their Netbook. It's the Google brand that will boost the price just enough to get in minimal quality. Google will be responsible for the entire experience, they can't leave this up to bottom line hardware vendors.