Intel (NASDAQ: INTC ) and Hewlett-Packard (NYSE: HPQ ) surged in June, driven by healthy corporate PC sales. Microsoft (NASDAQ: MSFT ) never really joined that rally. And you know what? Redmond had no reason to soar on Intel's update, after all.
A brand new commercial PC market report from The NPD Group explains why. As it turns out, Google (NASDAQ: GOOG ) Chromebooks are stealing a large slice of the commercial PC market, leaving Microsoft's Windows laptops out in the cold.
Comparing the first 5 months of 2014 to the same period in 2013, Chromebook sales jumped 250% to grab a 35% share of the business-grade notebook market. Apple (NASDAQ: AAPL ) MacBook sales increased more than 20%, but that still works out to just 7% of the American business laptop market. From a unit perspective, Apple increased its corporate-level notebook sales by about 60,000 units while Google and its system-building partners shifted 1.7 million more Chromebooks.
Meanwhile, the Windows-powered portion of the notebook market declined slightly. All this considered, corporate laptop sales did increase, but almost all of the new orders were for Chromebooks.
Don't write Microsoft off quite yet, though. Windows is seeing a renaissance in corporate desktop systems. Windows desktops outsold Windows-based notebooks in the January-May period, capping a long-term trend of rising desktop sales and slowly waning Windows laptop orders. The trend lines finally crossed:
Breaking down the Chromebook gains, Samsung remained the sub-market leader with a 48% share. But that's down from 88% in the year-ago period. Samsung's Chromebook shipments nearly doubled year-over-year while sales for Acer and HP jumped from infinitesimal to significant:
All of this makes perfect sense. Intel chips are the heart and soul of many popular Chromebook models, including important variants from HP and Acer, so a surge in this upstart technology should be good for the chip builder.
Google's Chrome-based operating system is not (yet?) a player on the desktop, leaving Apple and Microsoft to do battle over the less mobile computing segment.
All of this is fine and dandy, especially for Intel. But did you notice what's wrong with this picture?
The entire corporate laptop market in America amounts to just 2.5 million units in 5 months. At the same time, Apple sold around 15 million iPhones between January and March of 2014 -- a shorter span than NPD Group's 5-month report.
In other words, the PC market is almost vanishingly small next to the booming mobile sector. I know we're comparing apples to orangutans here, weighing corporate sales against the full market. But the big picture is clear: Mobility matters, and the entire PC market is becoming a rounding error.
Do these corporate PC figures matter to anybody?
The segment is still large enough to matter for Intel, who reaps 35% operating margins in its PC client group. HP's personal systems division collects just 3.5% of its sales as operating profits.
But these numbers explain why Microsoft is so desperate to find new ways to stay relevant. Chief Executive Officer Satya Nadella is betting the farm on cloud computing and mobility, and for good reason.
For HP, the Chromebook surge is a nice little bonus. But CEO Meg Whitman is refocusing the IT giant on back-end server systems and cloud services, so Chromebooks don't really move the needle for her multi-year turnaround plans.
And Google will obviously take all the goodwill that a surging Chromebook platform may offer, but Android is the platform that really matters. You won't see Google calling Chromebook a "hobby," but that's really what it is.
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