I've been saying for a couple of years that Google would do an office suite, operating system, and co-branded PC. Eric Schmidt told me to my face at CES last year that they would never do an Office Suite--which of course they did.

He also told me they would never do a OS or a PC. Well, Dell is bundling Google apps with their PCs now (as you can see below), and I predict that in 2007 Google will release an Operating System and a super discount PC. Think, a $300-400 PC all-in-on unit that is sold at cost in order to make money off of their services.

Think about being Dell or Gateway and being offered a) a free OS and b) 1-5% of the revenue from Adsense on the computer? How can you turn that down when it's going to be double or triple your margin on a PC?!

The next upgrade cycle for Office is dead in the water thanks to the Google Office suite.

The Google OS will come out in 2007, and in 2008/2009 the Windows upgrade cycle will be ankled.

Go Go Google!!!