Chromebooks -- low cost laptops powered by Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) web-dependent operating system -- have outsold Apple's (NASDAQ:AAPL) iPad in a key market: according to IDC, Chromebook shipments to U.S. schools narrowly outstripped iPad shipments in the third quarter.
Although the demand for Chromebooks remains modest relative to the larger PC market, Google's laptops have been building momentum -- enough to attract the attention of Microsoft (NASDAQ: MSFT). Despite the fact that Chromebooks account for less than 5% of the PC market today, that hasn't stopped the Windows maker from targeting them aggressively.
Taking it all in and with the ongoing shift in the educational market, Apple should be just as concerned with Chromebooks as Microsoft.
Chromebooks can be a great alternative to Windows laptops
ChromeOS -- the operating system powering Chromebooks -- is extremely limited in what it can accomplish. In fact, it's largely just Google's Internet browser, Chrome, augmented with a rudimentary file explorer and a few hardware settings.
Despite their simplicity, it's easy to understand why Chromebooks have drawn the ire of Microsoft. Given the growing prevalence of cloud-based software and Internet-based streaming media, Chromebooks can serve the needs of an increasingly large proportion of traditional PC users -- especially those who spend their time simply checking email, connecting on social networks, watching videos on YouTube, and typing a few word documents. The inherent limitations of Google's operating system make Chromebooks ill-suited for power users, but for the typical consumer, Chromebooks can offer most of what they need.
And they do it at a fair price, with excellent battery life, solid build quality, and a strong resistance to traditional viruses. Lenovo offers its ThinkPad 11e laptop in two models, one powered by ChromeOS, the other Windows 8.1. Despite offering virtually identical specs and the same construction, the ChromeOS version is nearly $150 cheaper, boots almost instantaneously, and doesn't require anti-virus software.
...But it may be an even better tablet alternative
In other words, it offers many of the same things that make Apple's iPad an attractive Windows PC alternative. In recent years, many consumers may have substituted an iPad in place of a laptop, as the introduction of the iPad, and steady growth in the demand for tablets, has coincided with a decline in traditional PC shipments.
Could consumers soon buy a Chromebook instead of an iPad? Some educational institutions have already made the switch. After sampling both devices, the Hillsborough School District in Hillsborough, NJ, sold its iPads and replaced them with Chromebooks, according to The Atlantic. With their built-in keyboards, Chromebooks offered significant productivity advantages over Apple's tablet.
Chromebooks as a disruptive force
Of course, the educational market is just one avenue for the iPad. In 2013, Apple sold 71 million iPads -- millions to schools, but most to typical consumers. Even if the iPad were to be shut out of the educational market completely, Apple could still sell tens of millions of tablets globally.
But the factors that make Chromebooks attractive to schools might make them attractive to typical users as well. Chromebooks' ability to weigh on the tablet market cannot be discounted. Although Chromebooks sold only around 5 million units last year, they remain a disruptive force -- a thorn in the side of both Apple and Microsoft.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.