Google’s Chromebooks Could Be the Future of Personal Computing

Few tech observers take them seriously, but they're getting harder to ignore. More companies, including Hewlett-Packard (NYSE: HPQ  ) , are starting to offer Chromebooks -- laptops running Google's (NASDAQ: GOOGL  ) Chrome operating system. This is obviously problematic for Microsoft (NASDAQ: MSFT  ) , as Chrome OS could become yet another threat to Windows.

The problem with Chromebooks
Admittedly, it's a bit disingenuous to characterize Chrome OS as a real operating system -- for the most part, Chromebooks can't run local software. Instead, what they offer is merely a slightly souped-up version of Google's popular Chrome browser. In effect, Chromebooks are merely gateways to the Internet.

But that means that they're cheap -- Acer's 11.6-inch Chromebook costs just $199. They're also lightning fast -- there's no software running in the background to slow the computer down -- and invulnerable to viruses.

For the average user, one who spends their time browsing the Internet, checking Facebook, reading email and doing some light word processing, Chromebooks are ideal. But even among business users, Google's operating system could be an attractive alternative to Microsoft's Windows.

Software is migrating to the cloud
That's because increasingly, companies are relying on cloud-based software. Here, Google's Chromebooks tackle the job quite easily, able to handle the popular cloud-based programs offered by companies like Salesforce. Even AutoCAD, Autodesk's demanding drafting program, is now available as a cloud-based application.

Asus, when announcing that it was going to start making laptops with Google's operating system, characterized Chromebooks as being potentially more popular among government agencies and businesses than consumers.

Asus and Acer aren't the only companies making Chromebooks -- Samsung's $249 model has been the top seller on Amazon since January, and Toshiba and Lenovo have also announced Chromebooks. More recently, struggling Microsoft Windows PC-maker HP has embraced the Chromebook with gusto, releasing its second model earlier this week.

Hewlett-Packard moves away from Microsoft, embraces Google
There are growing signs that Hewlett-Packard is becoming uneasy with Microsoft. During Hewlett-Packard's analyst meeting on Wednesday, CEO Meg Whitman characterized Microsoft as a competitor. Although Microsoft and Hewlett-Packard remain major partners for the time being, that relationship is starting to look fragile.

Microsoft's failure to deliver a solid product in Windows 8 may be partially responsible for the declines seen in PC sales, a major factor in HP's ongoing struggles. More important is Microsoft's decision to begin making its own hardware, like the Surface and Surface Pro, which competes directly with HP's own Windows 8-based tablets. Microsoft even loaned Michael Dell $2 billion to help him take his company -- one of HP's biggest competitors -- private.

It's little wonder, then, that HP has been working more closely with Google. HP has released several Android-based tablets, and has been helping Google sell its Google Apps to small businesses -- a competitor to Microsoft's Office.

That partnership extends to Chromebooks. The HP Chromebook 11, released earlier this week, follows the HP Chromebook 14, announced last month. Still, this is a relatively new direction for HP -- it released its first Chromebook just last February.

As HP's relationship with Microsoft grows more uncertain, the PC OEM may put more emphasis on Google's operating system

It isn't just mobile devices that threaten the Microsoft Windows PC
While most observers agree that mobile devices, including smartphones and tablets, are weakening the demand for traditional PCs, Google's Chromebooks also loom as a potential threat. Although their market share may still be relatively tiny, it's one PC sector that's actually seeing growth.

Moreover, Microsoft, in its quest to break into mobile, has alienated some of its hardware partners, including HP, who have begun to push Google's Chromebooks as an alternative to traditional PCs running Microsoft's operating system.

For now, Chromebooks may remain an oddity, but as more of them are released, and more software migrates to the cloud, they could become a real force in the world of personal computing. Certainly, they shouldn't be underestimated.

The rise of Chrome OS is just a tiny part of the Google story
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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 October 13, 2013, at 11:33 AM, d42chad wrote:

    Despite what some people think, 90% of pc users do NOT need a top of the line macbook pro or a fancy feature filled windows pc. All they ever use is the internet to check email and facebook. Other than that, Google Drive has come a long way and I would consider it to be better than Microsoft Office due to its simplicity. I think these chromebooks are great. I personally don't have one yet because I already have a Thinkpad from work but a chromebook will definitely be my next purchase.

  • Report this Comment On October 13, 2013, at 11:43 AM, PhillipDeCooch wrote:

    Google Drive has come a long way. I find myself using it more and more. Having your docs available on any device any where is nice, and being able to edit them online is awesome. I could see Chromebooks becoming a big growth market over the next 5 years. But who knows, the future is hard to predict when it comes to products that are similar to existing ones with such a death grip on the market like Windows has on the PC OS market.

  • Report this Comment On October 13, 2013, at 12:19 PM, aza400 wrote:

    Window? Microsoft? never heard of them.

  • Report this Comment On October 13, 2013, at 12:25 PM, GrdDog wrote:

    "and invulnerable to viruses." LMAO if it connects to the internet is it vulnerable to an infection of some sort.

    Laptop and Smartphones will always be expensive throw away devices; that is fact.

    What will kill Microsoft and other Operating System makers,as well as computer makers; is if Google or another system maker makes a desktop that runs a Linux Version (Like Google) and not Microsoft.

  • Report this Comment On October 13, 2013, at 12:39 PM, Netteligent09 wrote:

    Google's Chrome OS and Chromebooks are only the beginning to lay the foundation for future to come.

    So far, Google and its strategic partners execute very well to build new ecosystem.

    More killer apps are on the way.

  • Report this Comment On October 13, 2013, at 12:40 PM, iSee2 wrote:

    *Sigh* Chrome books are NOT particularly fast, especially the cheap ones. And they are not invulnerable to viruses. Where the heck did that come from?

    They are cheap... IF they run ALL the software you need. Otherwise they'll be an additional cost over another device. Maybe businesses will embrace them in some situations, but I doubt consumers will.

    Android devices are similarly cheap, can do everything a chrome book can and are much more capable.

  • Report this Comment On October 13, 2013, at 12:54 PM, syzygysyzygy wrote:

    I have chromebook am well satisfied but just wish they supported Java so i could access my favorite chats-------- but even there is plenty chats non java

  • Report this Comment On October 13, 2013, at 1:21 PM, Mike655mm wrote:

    I bought a brand new 15.4" Win8 2.4GHz Pentium dual core full feature Lenovo laptop on sale last year for $270. It's great & I'm real happy with it. Internet-only Chromebook prices need to be less than $200

    Even so, I need standalone capability for my primary PC. Chromebooks would only make sense to me as a 2nd computer

  • Report this Comment On October 14, 2013, at 2:53 AM, ravi0009 wrote:

    For Chromebook to get full fledged office requires another $100, which makes it equivalent to normal Laptop

    Also it supports junk and fishy ads and malware.

    For corporate guys like me, i need office and security both at my personnel and Office machine

    Google drives ?? why would i have it when i have better option like SkyDrive with Windows account.

    So this cheap device is definitely a big NO......

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