Google Copies Apple in More Ways Than One

There's no denying it: Google (NASDAQ: GOOGL  ) is copying Apple (NASDAQ: AAPL  ) with its new Chromebook Pixel.

There is an abundance of subtle nods in Cupertino's general direction that evidence the company's admiration. Everything from the industrial design to the excessive use of marketing hyperbole to the simple fact that the laptop is crafted out of anodized aluminum and features a super high-resolution display. The Chromebook Pixel is also competitively aimed squarely at the 13-inch MacBook Pro with Retina display.

13-inch MacBook with Retina display (left) vs. Chromebook Pixel (right). Sources: Apple and Google. Images not shown to scale.

Does the search giant's big push into premium PC hardware have a shot at success?

A long shot
One thing that the Chromebook Pixel has that Apple doesn't is a touchscreen display. That's potentially a differentiator for users that want to get a little more touchy-feely with their laptops.

First, let's compare the two laptops in specs and pricing.

Specification

13-Inch Retina MacBook Pro

Chromebook Pixel

Display size

13.3-inch

12.85-inch

Resolution

2,560 x 1,600

2,560 x 1,700

Pixel density

227 pixels per inch

239 pixels per inch

Touchscreen?

No

Yes

Cellular?

No

LTE on 64 GB model

Processor

2.5 GHz Core i5 / 2.6 GHz Core i5

1.8 GHz Core i5

Operating system

OS X

Chrome OS

Storage

128 GB / 256 GB

32 GB / 64 GB

Price

$1,499 / $1,699

$1,299 / $1,449

Sources: Apple and Google. Standard configurations shown on MacBook Pro.

The Chromebook Pixel undercuts the Retina MacBook Pro by a couple hundred dollars on both the standard and high-end configurations, while offering certain perks like touchscreen capabilities and 4G LTE connectivity on Verizon's network. Google was even able to finagle a monthly allowance of 100 MB of data for two years included in the purchase price.

Those advantages aside, the Chromebook Pixel still has the odds stacked against it. Here's why.

An even tougher sell
The Chrome OS itself is little more than a web browser, which is one way that Chromebooks are such lightweight devices that can boot extremely quickly. The first time that Google launched a Chromebook, it was Samsung's Series 5 Chromebook that retailed for $450. That laptop was quickly derided as an expensive web browser that couldn't compete at that price point with full-featured Microsoft laptops that cost the same.

For example, here are some telling excerpts from CNET's review of the Series 5 Chromebook:

  • "If the Chromebook were $99, this could have been a revolutionary product. As it currently stands, it's merely an invitation to pay a lot of money to be part of a Google experiment. And you're the test subject."
  • "I applaud Chrome OS and its simplicity, but if you want a taste of it, here's my advice on how to get it for free: download the Chrome browser on your computer, and then install your choice of apps from the Chrome Web Store. There, you're done."
  • "There's no good reason to buy a Chromebook at this price."

In direct contrast, the most recent batch of Chromebooks are exactly what the CNET editor ordered. They were even lighter weight, were frequently built with cheaper components often found in other mobile devices, and were (and continue to be) available for price points from $199 to $330 from Acer, Samsung, and Hewlett-Packard. Google even smartly positioned them as secondary PCs. It was brilliant.

If the $450 price point is a tough sell for a laptop that's exactly a netbook, how will a $1,299 laptop fare? The high-resolution touchscreen is undoubtedly impressive, but is that enough when the operating system itself is so bare bones?

The fatal flaw
It's also not as if Apple is seeing explosive sales of its 13-inch Retina MacBook Pros. The company just aggressively slashed pricing on those models by $200 to $300, which hints that it wasn't selling as well as the company would have liked. Tim Cook also implied that laptop units were down roughly 6% in the fourth quarter, and OS X is a very mature operating system at this point.

If Google had priced the Chromebook Pixel at $600 to $800, enough to undercut even Microsoft's Surface Pro, then the search giant might have had a winner on its hands. Price is easily the Chromebook Pixel's fatal flaw.

Let's try this hardware margin thing we've heard so much about
The pricing shows another, perhaps more important, way that Google is copying Apple -- pursuing hardware gross margin. While Big G has historically sold its hardware at cost, most notably with Nexus devices, Chromebook Pixel is a distinct departure from that strategy.

There's no way that this laptop costs $1,300 to build, which means Google is trying to profit up front. On the bright side, possible hardware margins could help pay for those rumored retail stores.

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  • Report this Comment On February 22, 2013, at 7:32 PM, marv08 wrote:

    "It's also not as if Apple is seeing explosive sales of its 13-inch Retina MacBook Pros. The company just aggressively slashed pricing on those models..."

    Well, if you had done some research, you could have easily detected the reason for the reduced pricing: Apple lowered the pricing for CPU, SSD and RAM options throughout the entire product line to reflect reduced component prices. The price reductions for the "Retina" MBPs are fully in line with these reductions. I would rather interpret this as an indication for good sales of these models, as Apple obviously expects to meet revenue and earnings guidance despite the pricing reductions.

  • Report this Comment On February 25, 2013, at 4:16 PM, TMFDanielSparks wrote:

    I enjoy your connection here with Google's attempt to pursue hardware gross margins up front. I think this is exactly what Google is doing. Maybe premium priced tablets are next.

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