Microsoft's Steve Ballmer Strikes Again

It seems every time Microsoft's CEO mocks a new tech product, it becomes a best-seller. Sales of Google's Chromebooks are starting to pick up, much to the chagrin of Microsoft and Apple.

Jan 5, 2014 at 7:07PM

It's a shame that Microsoft (NASDAQ:MSFT) CEO Steve Ballmer will step down from his post -- away from the limelight, investors will lose out on his uncanny ability to correctly foresee upcoming tech trends.

It's simple: If Ballmer has mocked it publicly, it's almost guaranteed to become the next big thing. When Apple (NASDAQ:AAPL) introduced the iPhone, Ballmer couldn't stop laughing. The keyboard-less, $500 smartphone he was convinced would never catch on with business users went on to revolutionize the world of mobile computing.

Now it looks like history is about to repeat itself: Google's (NASDAQ:GOOGL) Chrome operating system is starting to catch on, much to the detriment of Microsoft and, to some extent, Apple.

Ballmer on ChromeOS
Shortly after Google announced ChromeOS, Ballmer was asked about Google's cloud-dependent operating system -- what did he think of it, and was Microsoft planning something similar?

"I will be respectful," Ballmer responded, cracking an enormous grin and holding back a laugh. "Who knows what this thing is? ... They already announced an operating system [referring to Android]. ... You don't need two client operating systems."

Fast-forward to today: Chromebooks, laptops running Google's ChromeOS, have finally caught on, and Microsoft has responded with an aggressive, anti-Chromebook advertising campaign.

Chromebooks are starting to sell quite well
When the first anti-Chromebook ad made its debut, a number of tech observers were left scratching their heads: Why was Microsoft giving Google free advertising? Chromebooks, while full of potential, just hadn't sold in large enough quantities to be considered a legitimate threat.

But recent sales data challenges that notion: Chromebook sales have really started to pick up. In December, research firm NPD reported that, for the first 11 months of 2013, Google's Chromebooks composed about 21% of the business-to-business notebook market, up from basically nothing in the prior year.

On, two of the three best-selling laptops during the holiday shopping season were powered by Google's ChromeOS. Admittedly, Amazon is just one retailer, but it's an extremely important one.

Why Microsoft and Apple investors should be concerned
As the demand for Chromebooks grows, investors in both Microsoft and Apple have reason to be concerned. Obviously, Chromebooks are an alternative to PCs running Microsoft's Windows or Apple's Macs, but going forward, they could start to steal sales from the tablet market.

As Microsoft's ad points out, Google's Chromebooks are limited in what they can do. They aren't total paperweights without the Internet, but they certainly aren't machines built for power users. They excel at basic computing tasks -- browsing the Internet, checking email, and using Google Apps -- while they start up almost instantaneously, remain largely impervious to viruses, and update themselves. They're also cheap and fairly lightweight.

In short, Chromebooks offer the sort of computing experience that many tablet buyers may have been after. They don't run apps, but typing and doing productive work is far easier on a Chromebook than it is on a tablet.

Apple has seen sluggish iPad demand in recent quarters -- in October, Apple said it sold just 14.1 million iPads, largely unchanged from the prior year. This might be a sign that the market is nearing saturation, or that competition is rising from tablets running Google's Android, but tablet manufacturers, of which Apple remains the largest, could lose potential sales to Chromebooks.

The next great tech trend
As with the iPhone before it, ChromeOS is starting to emerge as the next great tech trend. Hardware manufacturers from Acer to Samsung to Dell and LG have embraced Google's operating system, and Chromebooks are finally starting to catch on.

With their vast limitations, Chromebooks certainly aren't for everyone, but their price and ease of use make them attractive alternatives to both PCs and tablets -- and a threat to Microsoft and Apple.

A better investment than Microsoft and Apple?
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends, Apple, and Google and owns shares of, Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers