Hewlett-Packard gives Google's OS a chance

With release of her company's first laptop running on Google's operating system. Meg Whitman is trying to take her mature industry where the younger generation is going.

By TheStreet Staff May 31, 2013 5:00PM

thestreet logolaptop running Google's Chrome OSBy Anton Wahlman


I'm typing this review on Hewlett-Packard's (HPQ) divorce papers from Microsoft (MSFT).


For the first time, HP has launched a laptop based on Google's (GOOG) PC operating system, Chrome OS. It's a wonderful 14-inch laptop priced at $300 with no expensive add-on gimmicks. You should buy one.


Before I get into the review, I have to set the stage for why this is happening. Why is HP no longer exclusive with Microsoft's Windows PC operating system?


It all starts with CEO Meg Whitman. When she assumed the role as chief executive, there were many fires to triage. Many things were about organizational management, balance sheet optimization -- frankly, firing layers and layers of fat. Blocking and tackling.


Ultimately, though, getting in shape physically doesn't help you win the race if you're running in the wrong direction. You need to be running in the right direction; you need to be on the right technology bandwagon.


Whitman did what I did: Go sample the 16 cafes closest to the HP headquarters. This is Stanford and Facebook (FB) territory, folks. She probably saw what I saw: Almost everyone was using Apple (AAPL) laptops -- almost nobody was using Microsoft Windows PCs.


Oh well, there was one: He was in a suit. Turns out he was some accountant-banker-consultant type visiting from New York. For all I know, he may have been working on HP's now-defunct old PC strategy: Typing on his HP Windows laptop wearing a conservative suit, he stood out as if he were wearing a turban and pink dress in an Amarillo, Texas, Baptist church. 


Whitman saw what I saw: The younger demographic has already left Windows PCs, and they are all using Apple MacBooks. No matter what she would do in terms of cost-cutting, it would not stem the Windows PC revenue decline that is secular in nature.


Then she went to her neighbors in Palo Alto. Tim Cook won't license his Mac OS to HP -- or anyone else. Larry Page and Sergey Brin, however, were more than thrilled to help Whitman see a new light in HP's PC tunnel. So they licensed her their beloved Chrome OS.


But what future is there in Chrome OS? Isn't Microsoft Windows dominant? Chrome OS is now in 3,000 U.S. schools, and the entire public school system of Malaysia. As Lenin said, if you catch them while they're young they'll be loyal party members.


Windows 8 is a fine product, the soon-to-arrive Windows 8.1 will be much improved and HP will be offering a full line of Windows products for many years to come. That said, for HP to start down the Chrome OS path is a milestone. When Apple launched iOS in 2007 to augment the Mac OS, was it significant? Of course not. Did it become significant within a few years? You betcha!


The first HP Chromebook 

It looks almost identical to any of HP's less-costly Windows laptops you would pick up at Best Buy (BBY). It's black plastic that wins the General Secretary Leonid Brezhnev award for never making it near the Museum of Modern Art.


Black plastic is, however, durable, light and not as slippery as metal. I really don't care what it looks like as long as it's practical. So for me the HP Chromebook feels great, especially considering the bargain $300 price.


The screen is 1366 by 768, and it's not touch -- unlike the 2560 x 1700 touchscreen Google Pixel for $1,000 more. It's also too dull for my taste; it needs to be be brighter, just like the Google Pixel. But it's just fine for basic productivity. 


The keyboard is OK but not great. Apple, Samsung and Google itself have slightly better keyboards. When it comes to the trackpad, though, the differences are greater. This small trackpad with two buttons reeks of old Windows cheap stuff, and it doesn't hold a candle to Apple, Samsung and Google. Even after a week of using it, it kept slowing me down. 


With three USB ports, one HDMI and one wired Ethernet, the HP Chromebook has plenty of ports. The battery is tiny, but removable. I never got it to last more than four hours typing my articles. It needs to be at least 50% to 100% larger.

Quiet as a Tesla 

Furthermore, this first HP Chromebook lacks LTE. I normally use LTE all the time because I'm paranoid about using WiFi. For this reason, I had to connect this laptop to my smartphone's LTE modem instead of connecting it directly to AT&T (T), Verizon (VZ), T-Mobile or Sprint (S).


The CPU speed and fan noise were both perfectly fine. It's quiet as a Tesla (TSLA) and whip-snap fast for basic productivity. There is nothing wrong with the performance of this HP Chromebook -- other than the obvious lack of advanced gaming capability. Then again, I work -- I don't play games or watch Netflix (NFLX). I type articles; I don't edit photos or pretend to be a DJ.


When you consider the $300 price, you have to realize that it doesn't compare to a $300 Windows laptop -- or for that matter a $1,000 MacBook. When you buy the HP Chromebook, the bottom line is $300. In contrast, when you buy a Windows or Mac, you may be buying additional software or warranties, costing you many hundreds of dollars.


With the HP Chromebook, you are likely using Google Docs/Drive -- which is free. Also, other than those "one in ten thousand" hardware failures, you should have no reason to troubleshoot it. So there is no reason to buy a warranty or ever visit a store to deal with a computer issue. This will save you thousands of dollars, hundreds of hours and lots of headache over the computer's life.

Advice for HP 

Where should HP go next with its Chrome OS devices? Let me offer HP some advice:

  • Create a product family. One 14-inch laptop is good, but also launch 12-, 13- and 15-inch models, plus a desktop PC and all-in-one PCs.
  • Improve the keyboard and try to match the trackpads from Apple, Samsung and Google.
  • Offer models with embedded LTE for those of us on the road or paranoid about security.
  • Increase the size of the battery so that it is at least six to eight hours, preferably 10+.
  • As soon as Google is ready, HP needs to be the first to offer the Chromephones and Chromepads I described in these two articles on Tuesday and Thursday.

If HP makes a name for itself as the "go to" device maker for Chrome OS, whether on the PC or on the tablet (Chromepad) and smartphone (Chromephone), it could have the kind of epic run Dell (DELL) had in the PC business 25 years ago, or that Samsung had in the Android market over the last two years, when it grew to become the market leader in a brand new market, with hundreds of millions of units sold.


What should HP avoid in its Chrome OS strategy? Follow a cue from Dell and Samsung, again: Avoid clothing your Chrome OS-based PCs, tablets and smartphones in metal encasings. They are pretty but they are also heavy, expensive and slippery.

Like Elon Musk 

Like Elon Musk, Meg Whitman is taking a mature industry by the horns and moving to where the younger generation is going: Microsoft Windows is out, Chrome OS is in. HP's first Chromebook boots in a couple of seconds, updates automatically over the air, operates silently and requires no maintenance -- just like a Tesla.


It will take years for HP to be awarded Tesla's stock multiple, but Whitman has listened to the advice from her neighbors -- Brin, Page and, of course, yours truly, who has been writing a Chrome OS column since December 2010. She will not allow her PC business to continue to drift down together with the secular shift away from Windows PCs.


In this quest, the 14-inch HP Chromebook for $300 is a solid first offering. It's a bold move, and after one week of around-the-clock use, I endorse this product with a strong recommendation.


At the time of publication the author owns shares of Google and Apple.


More from TheStreet.com

Jun 12, 2013 2:49PM
Jun 4, 2013 7:01PM
Another interesting view on $HPQ is: http://beststock.co/johnny-duncan-analysis-on-hewlett-packard-company-hpq-until-jun-03-2014
Jun 4, 2013 1:10PM
While I don't quarrel with this author's slant, I would hope that the survey Meg Whitman undertook on OS covered much more ground.  And there are other OS as well, excluding MS.
May 31, 2013 8:02PM
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