Acer execs downplay Android, hint at Verizon Netbook deal

Acer executives said that Google's Android still has a long way to go before it can be used as the operating system for the hot new category of laptops known as Netbooks. And the CEO of the Taiwanese company hinted that its Netbooks may soon end up on Verizon Wireless' network.

At a press event Tuesday night to launch the company's new line of consumer and business computers, Chief Executive Gianfranco Lanci and Jim Wong head of Acer's IT products business line, told reporters that the company plans to use Google's Android operating system on its upcoming smartphone, but that it doesn't believe the operating system is ready for Netbook computers.

Acer announced its new smartphone in February at the GSMA Mobile World Congress in Barcelona.

"For a Netbook, you really need to be able to view a full Web for the total Internet experience," Wong said. "And Android is not that yet."

Acer currently offers its inexpensive Netbooks through U.S. wireless operator AT&T. And Lanci said during an interview after the event that the company is working with other U.S. wireless operators to bring Netbooks to their networks, too. He said that the company would be making an announcement very soon. But he stopped short of singling out any one carrier for this new announcement.

Given the company's existing relationship with AT&T, it's not a stretch to anticipate that the big announcement will likely be with Verizon Wireless. Verizon has already confirmed it is planning to sell a subsidized Netbook. And the company was touting its new strategy to get alternative devices, such as Netbooks, on its 3G wireless network last week at the CTIA tradeshow in Las Vegas.

As for Android, Lanci also agreed that he doesn't believe the software is ready for prime time.

"Android in my opinion is for communications," he said. "And Windows comes at the market from the computing side. An ideal solution would offer both. So right now we are using Android for our smartphone, and we are testing it on our Netbooks. But I think everybody in the industry is testing Android on Netbooks. "

Indeed, it appears that every Netbook is looking at Android. Last week, Hewlett-Packard confirmed that it is testing Android on its Netbooks. Asustek Computer has already said it is considering using Android. And Dell is also considering the software for its upcoming smartphone.

Android is a Linux-based operating system that was originally designed for cell phones. But now experts are predicting that the open-source operating system could be used on other devices, such as the emerging low-cost laptops known as Netbooks. In fact, market research firm Ovum recently predicted that Android-powered Netbooks will emerge in 2009, as manufacturers attempt to drive the price of Netbooks to around $200 or less.

But Lanci said that the company is quite happy using Windows XP on its Netbooks. The older generation of Windows is cheap, familiar to users, and provides the Internet browsing experience that is essential to the Netbook.

Though Linux operating systems, like Android, are free, the older version of Windows is actually inexpensive enough at around $25 to $50 per license that it doesn't affect the cost of these devices too much. As a result, Lanci said that Windows Netbooks are out-selling other Linux-based models.

"XP is a good solution for the price performance," he said. "If you look at it, the number of devices that are sold with Linux is very small."

Netbooks are the hottest segment of the computer market, and Lanci said he expects the market to continue to be strong this year even with the economic downturn. But he noted that price will play a major factor in adoption. And he said that subsidies by wireless providers, especially in the U.S. and European markets, are essential to adoption.

He said the sweet spot for the market is to sell these devices for $99 or less, with $49 being the ideal price. Just last week, the company announced a pilot program with AT&T to sell Acer Netbooks in Atlanta and Philadelphia for $49 along with a home and mobile data package that bundles DSL and 3G wireless service for $60 a month.

"Subsidies in the U.S. and Europe are very important," he said. "I think $49 is the best price. But it has to be offered with the right data plan."