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Chromebook sales surge during holidays — raising big questions for Microsoft

Image Credit: Acer
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Chromebooks, the minimalist laptops powered by Google’s browser-based Chrome operating system, exploded onto the market this year and appear to be finishing 2013 on a particularly strong note.

According to just one popular metric, Amazon.com is showing that Chromebooks make up three of its top four best-selling laptops.

And that’s after Chromebooks already boosted their overall  market share among commercial buyers (businesses, schools, governments, etc) through November this year to 21 percent for notebooks and 10 percent for all computers and tablets, according to market research firm NPD Group. That’s up from almost nothing last year: two-tenths of one percent for all computer and tablet sales.

That’s really rough news news for Microsoft, which is the principal loser of market share against the Chromebooks. For decades, “Wintel” computers, based on Microsoft’s operating system and Intel chips, have dominated the PC market. While Microsoft’s stock price has done well this year, in line with much of the rest of the technology market, its stock dropped Friday by 0.40 percent, to $37.29. Google’s stock was up 0.08 percent, to $1,118.40.

Chromebooks GoogleYesterday, ComputerWorld first noted Amazon.com’s Thursday announcement that a pair of Chromebooks — Samsung‘s Chromebook and the Acer C720 Chromebook — came in as two of the three best-selling notebooks during the U.S. holiday season. The third was Asus‘ Transformer Book, a Windows 8.1 device that can alternate between a 10.1-inch tablet and a keyboard-equipped laptop.

When VentureBeat checked just now, that Amazon ranking was still in place. And in fourth and sixth places are more Chromebooks: the HP Chromebook 14, and the Acer C720P Chromebook.

Google is doing with its Chrome OS for PCs what it did with Android for smartphones: It’s licensing its operating system to manufacturers essentially for free in the interest of spreading web-based devices that help Google to serve more web-based advertising.

That free operating system is just one thing that allows Chromebook manufactures to sell at prices that seriously undercut the more expensive Wintel PCs. A good part of Microsoft’s business is based on Windows, so it can’t afford to give it away for fee. Microsoft also has no comparable browser-based OS that allows a device to pull most of its core applications and functions from the web. Chromebooks exploit this advantage by offering devices with fewer hardware bells and whistles, for example less local storage and RAM.

The leading Amazon.com Chromebook sellers are selling for $199 (Acer) and $194 (Samsung), compared to the leading Wintel machine, which is selling for $439 (Asus). No wonder Google is starting to eating Microsoft’s lunch. The question is whether the market expected it to happen this quickly.

We may have to wait to hear Microsoft’s strategic response to the trend. Microsoft CEO Steve Ballmer won’t be the one who has to deal with the Chromebook threat. He leaves that responsibility to his successor, who is expected to be appointed early next year.

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