Google unwraps Chrome PCs too late for holidays

SAN FRANCISCO (Reuters) - The first laptops powered by Google Inc's Chrome operating system will reach store shelves months later than expected and miss the holiday shopping season as the Internet company fixes software issues.

The Web-centric computers, intended as an incursion into territory dominated for years by Microsoft Corp and Apple Inc, will ship around the middle of 2011.

Google is holding off launching the Chrome-based PCs until it can fix some software bugs and make sure that the computers are compatible with other devices such as digital cameras, Google product manager Sundar Pichai said on Tuesday.

"Amazing progress, but we aren't fully done yet," Pichai told reporters at a press briefing in San Francisco.

"If I'm shooting for one holiday season, I wouldn't be working on it. This is a journey," Pichai told Reuters.

Once they arrive, the computers will embody Google's strongest foray into consumer and business computing.

Prices of the laptops have not been determined, executives said when asked if the Web-centered notebook computers might cost less than traditional PCs which brim with storage and processing hardware.

"You will see a variety of notebook price units," Pichai said.

Samsung Electronics and Acer will make the first laptops. Intel Corp will make the processors in the first batch.

The first laptops will come with 100 megabytes of free wireless data transfers per month for two years, courtesy of Verizon Wireless. According to Verizon, streaming video for just two minutes every day amounts to 260 megabytes of data downloads in a month.

The laptops promote Web-centric computing, in which people use online applications instead of software loaded onto PCs.

As part of that effort, the company on Tuesday opened an Internet store selling about 500 games, news and other software applications for Chrome, carving out a bigger role in Internet media and entertainment.

BLACK IS BACK

The company did not explain how the Chrome operating system would contribute to profits. With Google's Android operating system for smartphones and tablets, Google offers the platform for free, but earns revenue from mobile advertising.

As with Android mobile phones, the Chrome software is expected to spur people to use the Internet more often, and likely to search for more things. That could boost Google's Internet ads business.

"Success is tens of millions of users using these products. That's what we work toward," Pichai said.

Google will earn 5 percent on every application sold through its online store, enough to cover costs, while most of the revenue goes to its developers.

Apple, maker of iPhone and iPad, said in October that it would open an applications store for its Macintosh computers as it tries to replicate the success of iPhone apps. That store is expected to go live early next year.

Google has begun a pilot program distributing prototypes to schools, businesses, developers and other users with the intent of collecting feedback.

The all-black "CR 48" prototypes come with 12.1-inch screens, 3G connectivity and webcams, but do not have any logos or branding.

The Chrome Internet browser, on which the operating system is based, has 120 million users, Google executives said. In May, it had 70 million.

Google shares closed up 1.5 percent at $587.14.

(Reporting by Alexei Oreskovic and Edwin Chan. Editing by Robert MacMillan, Bernard Orr)