Chrome Is a Bigger Threat to Windows Than You Think

Tablets aren't the only devices taking sales from PC makers. Google's (NASDAQ: GOOGL  ) Chromebook is also taking a toll, if comments from Acer are to be believed.

Chrome OS-based machines accounted for between 5% and 10% of the Taiwanese computer maker's U.S. shipments in the fourth quarter, company president Jim Wong told Bloomberg Businessweek in a recent interview. Overall shipments dropped 28% over the same period, suggesting a weak climate for Windows PC sales.

"Windows 8 itself is still not successful," Wong told the magazine. "The whole market didn't come back to growth after the Windows 8 launch, that's a simple way to judge if it is successful or not."

His account matches up with what we've seen recently from the PC industry's other key participants. For example, Intel issued uninspiring first-quarter earlier this month, continuing a trends that's seen the chip maker's revenue and profit decline over the past year.

Microsoft (NASDAQ: MSFT  ) hasn't fared much better. Windows division revenue came in at $5.9 billion, a 24% year-over-year increase. Trouble is, that total is more than $1 billion short of Microsoft's last major release: Windows 7 helped push division revenue to $6.9 billion in fiscal 2010's second quarter.

Mr. Softy's backers will rightly point out that 60 million Windows 8 licenses have been sold to date. And yet license commitments don't equal quantifiable PC sales. We've no idea how many "licensed" Windows 8 PCs Dell, Hewlett-Packard, and their peers have sold as of this writing.

Which brings us back to Acer. If Chromebooks are selling well enough to account for more than 5% of of sales -- enough that the company is considering taking the device to new markets -- then there has to be a growing base of customers who use it as a PC alternative.

Windows may still dominate the world, but the clouds are finally rolling in. Do you agree? Disagree? Either way, we want to hear you think in the comments box below. And remember: if you're interested in further analysis of Microsoft's prospects in a post-PC world, we've compiled a premium research report that digs into the details of the business and tells you whether the stock is a buy right now. Just click here to claim your copy.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 31, 2013, at 10:19 PM, somethingnew wrote:

    I wondered about this since Chrome came out..if it would effect traditional pc sales but this is the first article I've come across that addresses the issue. I haven't used a Chrome but I know I don't need much storage for my laptop I currently have since I only use it for internet and a few open source writing documents I could easily save on a flash drive. I don't know when my laptop will die and the only way I will upgrade is if it dies, but when/if it does I'd definately like to try a Chrome.

  • Report this Comment On January 31, 2013, at 11:59 PM, techy46 wrote:

    Chrome will be great for the Google's socialists where cheap is the real differentiator and they don't care about selling their souls to Google's advertsiing spam. We're going to have 2 billion Apple users that think they're smart, 2 billion Google users that are cheap skates and 2 bilion Windows users that have jobs in technology and don;t care what it costs and fans think.

  • Report this Comment On February 01, 2013, at 12:08 AM, lw67 wrote:

    Do any writers at the MF have a good word or thought about Microsoft?

  • Report this Comment On February 01, 2013, at 5:29 AM, rebellemming wrote:

    Knowing that my comment reveal this rebel as the polar opposite of a techy, never the less---.

    I use an acer netbook for information gathering from the internet with email reqired for interaction.

    an old windows platform was pre-installed. However, attempting to set up hotmail did not work because of server problems. I tried for a gmail. account but found a prior email account to be mandatory. Next was yhoo and finally in the very best cowboy fashion, shouted YAHOO!! AND I could adequately understand how to read, send, store or delete messages. WOW! (not so with the techy lingo of gmail).

    As both google and yahoo keep suggesting I install their offerings, I have been considering Axis given my email experiences.The absence of any reference to Axis in this (and other articles) gives me pause. Is Axis dead before it really starts or is it likely to become another FREE nail for the coffin of a revenue model that needs revision?

  • Report this Comment On February 01, 2013, at 3:45 PM, JeremyDean wrote:

    somethingnew,

    The Chromebook does fit your needs. In fact, it probably does those things much better than your current computer (for examples, it's faster, doesn't get viruses, your docs are backed up automatically and can be edited from any computer anywhere, no need to install software or updates ever)

    However, you have to set up a Google account (free), and get used to using Chrome browser for internet and Google Docs for your documents.

Add your comment.

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