Google's Chromebooks Are a Hit, After All

You might not have guessed it, but Google's (NASDAQ: GOOGL  ) Chromebooks are a hit after all.

There hasn't historically been a lot of readily available data on Chromebook shipments, as Google doesn't disclose them nor do OEMs. Only recently did Chrome OS show up in Internet usage statistics from Net Market Share -- with a measly 0.02%. Chromebooks are the new netbooks, and netbooks are already on their deathbed thanks to low-cost tablets, nearly all of which run Android.

Well, a recent Bloomberg report citing data from NPD says that Chromebooks are gobbling up the low-end laptop market. Over the past eight months or so, Chromebooks have grown and now comprise 20% to 25% of the market for laptops priced at $300 or less. The market researcher goes as far as to call this segment the fastest-growing subset of the broader PC market.

Laptops under $300 are expected to grow at least 10% this year, well above the 14% and 11% declines the worldwide PC market has experienced in the first two quarters of 2013. Gartner pegs Chromebook's share of the U.S. market at 4% to 5% in the first quarter.

NPD believes that after some initial searching, Chromebooks have found a niche spot in the market after the first batch of the devices were priced too high (closer to $500). Excluding the super high-end Chromebook Pixel that costs $1,300, the current Chromebook lineup is priced between $199 and $330. Samsung kicked things off in October, Acer followed suit a month later, and PC giant Hewlett-Packard joined the fray with its first Chromebook in February.

Much like how Linux posed a threat on the low-end to Microsoft (NASDAQ: MSFT  ) Windows during the first era of netbooks, Chrome OS does likewise. The software giant faces the same dilemmas since the low price points don't give OEMs as much room to pay Microsoft a Windows license fee. Hardware margins on the low end are already slim enough as it is.

Microsoft is aggressively targeting this market segment this year with smaller devices like the Acer Iconia W3, an 8-inch Windows 8 tablet. The software giant has no choice but to offer concessions and discounts to OEMs though, which could pressure margins and put the brand at risk.

The netbook is dead. Long live the Chromebook?

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  • Report this Comment On July 11, 2013, at 8:22 PM, 2sour wrote:

    25% of the sub-$300 laptop market ... how much competition is there? I suspect most people have looked at the chromebook and found that they seem like a great deal at first, but when you look more closely they're not. I'm not convinced they can fool enough people to continue selling them at that pace.

    On a different note ... I'll bet the profit margin on those is really great, isn't it? (If Apple started selling cheap laptops, someone would be screaming about the "shrinking profit margins").

  • Report this Comment On July 11, 2013, at 8:58 PM, marv08 wrote:

    @2sour: "If Apple started selling cheap laptops, someone would be screaming about the "shrinking profit margins"

    Yes. True. But then, most of the players in the cheapest laptop segment are not really expecting high profit margins. I mean, back in the heyday of the Netbook craze Acer was popping champagne when they got close to 2%. Heck, most budget line laptops and desktops delivered to enterprises have no margin whatsoever. (Apple knows why it is not in that business.)

    ===

    The problem with Chrome OS is not Chrome OS (uh, well, maybe besides globally growing privacy concerns thanks to the NSA). The devices are, despite their low price, quite a bit better than most Netbooks used to be (they e.g. have usable keyboards and at least acceptable trackpads now). The number one big problem with Chrome OS is the pathetic quality of the available apps (outside of Google's own, which are quite OK). Most products available from the Chrome Web Store shouldn't really exist, they are that bad. The number two problem is internet access (since most apps do not have proper offline support) and its limited and/or costly availability in many places.

  • Report this Comment On July 14, 2013, at 11:09 AM, AG4IT wrote:

    Chromebooks got off to a rocky start when they were first released, but Google has finally started to get the Chromebook concept message across to more and more manufacturers, retailers, analysts and users.

    But what about Chromebook users that need to access Windows applications like Microsoft office? They can try products like Ericom AccessNow, an HTML5 RDP solution that enables Chromebook users to connect to Terminal Servers and/or VDI virtual desktops, and run Windows applications or desktops in a browser tab.

    There's nothing to install on the Chromebook, so AcccessNow is easy to deploy and manage.

    For an online, interactive demo, open your Chrome browser and visit:

    http://www.ericom.com/demo_AccessNow.asp?URL_ID=708

    Please note that I work for Ericom

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