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Should the New Chromebook Be Free?

Google's (Nasdaq: GOOG  ) press event to introduce the new Chromebook was interrupted by an errant earnings press release that contained not only a "pending" quote from CEO Larry Page but also a whole mess of disappointing numbers.

Let's add another to the list: $249. That's what Google and Samsung want retailers to charge for the new Chromebook, undercutting not only Apple (Nasdaq: AAPL  ) and the MacBook Air, but also Dell (Nasdaq: DELL  ) , Hewlett-Packard (NYSE: HPQ  ) , and every other Windows machine maker. But at that price, why not just make the Chromebook free?

I'm completely serious. In the wake of the rollout, analysts panned the idea of paying up for a Chromebook when cheap Windows machines offer at least as much power and native software for nearly the same price.

You know what? They're right: the Chromebook comes with just 2 gigabytes of RAM, 16 gigs of solid state storage, two USB ports, a VGA camera, SD card slot, and HDMI port. Good, yes, but hardly different when compared to other portable computing options.

If there's a key difference here, it's the Chromebook is powered by a new Samsung processor built on ARM Holdings' (Nasdaq: ARMH  ) low-power architecture common to tablets and smartphones. An additional 100 GB of online storage for two years via Google Drive is a nice bonus, although at least one observer says this kicker isn't as applause-worthy as it might seem.

"Consumers do not want to choose between apps and Internet; they want both," Gartner analyst Carolina Milanesi told Computerworld. "The $249 is certainly an interesting price point, but consumers have been burned with netbooks and will be cautious and look beyond the price tag."

Fair point. As awesome of the device will undoubtedly be -- and I say that writing from a Chromebook I've been using for a year and a half now -- there simply isn't enough to differentiate the Googly PC from alternatives. Making a limited-run free version would alter the equation entirely. Call it an open source laptop, where fees are limited to premium service and support.

Now it's your turn to weigh in using the space below. Is Google making a mistake pricing the Chromebook at $249? Would giving it away disrupt the market, or the search star's profits? Those aren't easy questions to answer, though we can be sure that the overall spread of fast wireless networks is helping boost demand for consumptive devices such as the Chromebook.

One of our star analysts sees a huge opportunity in these devices. Specifically: a Samsung competitor that is making a killing powering a range of inventive new wireless devices. Do you know this disruptor? A free special report has the name and all of our analyst's research. Click here to get your copy instantly.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Apple and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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  • Report this Comment On October 19, 2012, at 5:52 PM, ICanFool wrote:

    Anything given free is not appreciated. A token price of 250$ will keep only responsinke people sign up. 100GB free cloud STORAGE IS awesome. It is the model enough to get people hooked on to the CLOUD. Once everyone gets hooked they will find ways to make money.

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