Chromebooks: A bright spot in the dark PC market

Chromebooks: A bright spot in the dark PC market

Summary: Yes, the PC market is going to hell in a hand-basket -- except for the sub-$300 market where the Linux-based Chromebook is leading the way to growth.

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It's no secret that the PC market is awful. With tablets on one side and Windows 8's failure to gain market success on the other, worldwide PC sales have dropped more than 10-percent in the last quarter alone. According to retail sales analysis firm NPD there is one bright spot though: low-priced notebooks with Linux-based, Chrome OS-powered Chromebooks.

ARMchromebook
In an otherwise dismal PC market, Chromebooks are selling like hotcakes.

In an interview, Stephen Baker, NPD's Vice President of Industry Analysis for Consumer Technology, said, that "In the last eight months Chromebooks have snagged 20 percent to 25 percent of the U.S. market for laptops that cost less than $300." Indeed, by NPD's numbers they are the fastest-growing part of the PC market. Baker added that "Chromebooks have come out of nowhere to claim about 5 percent of the total PC market."

The Chromebook Gallery

What's driving this growth has not been the high-end Chromebook Pixel, but low-end Chromebooks such as the $199 Acer C710-2856 Chromebook and the $249 Samsung ARM-powered Chromebook

While Chromebooks are what's pushing this market segment, bottom-of-the-line Windows 8 laptops on regular sales are also contributing to growth in this market according to Baker. "The entire low-end market, under $300 is growing. There's a trend towards aggressively priced PCs. These PCs are filling in the space left where the netbook used to be."

The Chromebook, in particular, Barker continued, is "growing for lots of reason. First and foremost, even cheap Chromebooks come with better hardware in this iteration." In addition, Chrome OS now "allows much more off-line activity, the Chromebook is no longer an always online device." Finally, "Google has spent significant money to promote the Chromebook and explain how it works to consumers."

Chromebooks are finding customers not just because of Google's efforts. "Outside of what Google is doing, the computer industry is flying from the old PC center. Everyone is looking for new processes and partners. It's not the same old business. Microsoft's partners are looking for new relationships, forcing Microsoft to compete with its old partners. Google came into the market with a product that meets a need and it's a good alternative to the same old stuff."

Now,  Acer, Asus, HP, Lenovo, and Samsung are all now selling Chromebooks. In addition, Chromebooks that are now sold in 6,600 retails stores including Best Buy and Wal-Marts. Chromebook is now in the business retail channel now from Staples, Fry's Electronics, Office Depot, OfficeMax, and TigerDirect.

To make Chromebooks more attractive to enterprises, Google has recently inked deals with Citrix and VMware to bring business applications to Chromebooks.

As for tablets, the PC's big, new rival? Baker thinks the Chromebook makes a fine partner and alternative. "Chromebooks offer Google services out of the box, an integrated keyboard and screen, and they don't require extra accessories. That's a great value proposition for a sub-$300 notebook."

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Topics: Laptops, Google, Linux, Microsoft, PCs, Windows 8

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106 comments
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  • Tight spot

    Microsoft is finding itself in a bit of a tight spot at the moment: At the high end, Apple seems to be dominating; they make beautiful hardware, and market their products as premium products. Google is dominating the low end with Android devices and increasingly with Chromebooks. OEMs will naturally prefer to go with Google, as it is free, while MS still relies on a licensing fees. The problem is, when you get to ultra-low prices, the licensing fees drastically reduce the profit to any manufacturer. Google can afford to do this, as it makes its revenue through advertising. MS has not to date been able to achieve this.

    The only way MS can compete is to drastically reduce license fees, which of course won't go down well with shareholders. In many ways it is finding iteself between a rock and a hard place.
    Tom.SmithZA
    • And yet, no seems to be buying them...

      ...You still never see people that have a chromebook. The only reason I have one is because I got it free. I wouldn't have paid for it.

      They are effectively trying to replace the NetBook segment that these same device manufacturers abandoned. ChromeBook is the same NetBook that does less.

      Yet, as poorly as Windows Phone has done, it has greatly outsold Chromebook devices, to put it in perspective folks.
      gomigomijunk
      • Anecdotal evidence.

        Just because you don't see something doesn't mean it isn't true. Your sample size is miniscule compared to the global sample size. However, to provide some evidence, I just checked on Amazon and the top selling laptop is still the Chromebook (as it has been for many months). I know that this is also hardly an absolute measure of popularity, but it does provide some evidence.
        Tom.SmithZA
        • Strange Beast

          Its been on Amazon best selling list like that for a long time; however, I have yet to see one being used by someone in public and all my local bestbuys e.t.c. still constantly have them in stock and never run out. Either there is an endless supply of them or they are not selling.
          Darko Gavrilovic
          • windows PCs are not selling at all

            because they never seem to be out of stock on them. What a dud !

            Chromebooks are being deployed in K-12 schools, SMBs, and applications where connectivity and cloud based apps are the norm.
            GrabBoyd
          • We have two of them

            My two daughters share one, and I have one as well. I use mine at work BYOD. :)
            I agree that it takes the place of a netbook, but they are MUCH faster.

            You can load full fledged Linux distros on them as well.
            sys_engineer
          • ChromeBook will be my next notebook...

            ... and i'm planning to install Linux Mint on it.
            MacBroderick
          • Don't support Google!

            Google is the worst enemy that linux and free software ever had!... it atacks from the inside. It gets everything from open source, but is one way ticket, there is not feedback (think about Android). If you bought a chromebook, Google would intrepreted that its strategy is completely succesful. In my opinion if you want to support open software is to buy a NetBook running a real linux distribution by default.
            Francisco Javier Guijarro Martínez
          • Darko, for whatever it is worth...

            ...I bought a Samsung Chromebook XE303 (i.e. the $249 chromebook) in late January 2013, and it was manufactured...in January 2013.

            (There is a sticker on the bottom of the chromebook that tells you when it was manufactured.)
            CHIP72
          • Did not know

            I did not know that. I guess they make a lot of them.
            Darko Gavrilovic
        • Most other PC's

          you purchase from the manufacturer or retail store.
          not amazon so they wont be on any amazon list
          for example
          do people actually purchase Dell computers from Amazon or Dell?
          thekman58
          • Look at the Amazon top 100 list

            @thekman58 : To answer your question: BOTH. Eight Dell models are listed in Amazon's top 100. The Samsung Chromebook has been in Amazon's top 100 laptops for 260 days, almost every one of which in first place. However, if you look down their top 100 list, you will see 3 Chromebooks, 2 Dells, 5 Apples, 3 HPs, and 6 ASUS laptops, plus an Acer Aspire in the top 20.

            Amazon sells a lot of computers, and with free shipping, no sales tax, and the highest customer satisfaction ratings in the industry, I would not consider buying a computer anywhere else.
            S_Deemer
        • Chromebook is a device

          No comparison. MS products are outselling Chromebooks, not even close. MS supplies an OS, so add up all the notebooks being sold with Windows, and you'll find that Chromebook isn't even on the radar.
          Vabraxys
          • garysvb@...: "Chromebook isn't even on the radar"

            But, GNU/Linux-based Chromebooks are on retail shelves, both brick & mortar and virtual. Google, with Chrome OS, has broken through the glass ceiling.

            Now, at least, consumers can see that Chromebooks exist and can choose to purchase one. Or not.
            Rabid Howler Monkey
          • true, but...

            They're not. Overwhelmingly, they're still choosing Windows devices. Singling out a particular device as being part of Amazon's best selling has little significance from a market share perspective unless compared to competing devices. The author has, one again, disingenuously assigned some market significance to a device that, when put in perspective, has little or none.
            Vabraxys
          • about growth not numbers.

            More chromebooks are selling now then were then.. less windows are selling now then were them. Read the article, it's talking about growth not numbers.
            frankieh
        • Amazon rankings?

          You are basing your conclusions on Amazon rankings? Who knows how fixed they are. And that is just ONE site.
          Gisabun
      • of course, you are wrong

        because I haven't seen a Surface ReTard or Pro, doesn't means they don't exist.

        Now, for a sake of logic, you don't pit CB against WP8; WP8 you pit it against Android, and CB against Surface.

        Fact is, CB are selling and every mayor OEM is active in the market. I predicted time ago that ChromeBooks would outsell Surface RT, seems is happening. In fact, I believe Chromebooks will grow bigger than MS Surface line. That's why MS is running scared and we have so many posts badmouthing ChromeBooks.
        theo_durcan
      • I have one

        and I saw another guy with one at the coffee shop down the street
        theoilman
      • Abandoned? More like "driven off".

        OEMs didn't "abandon" netbooks -- they were deliberately driven off (by Microsoft, abetted by Intel). This had nothing to do with what the customers wanted to buy, but with what MS and Intel wanted to sell.

        Stores that actually had comparable models on the shelves and display counters side-by-side with both Windows and Linux, found in practice that the Linux models did quite well.

        For example, the Asus EeePC 901 when introduced to a major British bricks&mortar chain, found that the Linux model did much better; in fact the Linux version sold out, while the Windows version hung around gathering dust -- but the chain couldn't order more of the Linux model -- and Asus's official excuse was that Asus was "committed" (their word) to producing the Windows and the Linux versions in equal numbers. (Asus also blamed a shortage of Intel Atom CPUs. If you think about that for a moment, the flaw in that logic becomes apparent).

        For another example, Dell found that the Linux versions accounted for a full third of their netbook sales -- despite the fact that their Linux hardware was so carefully segregated from their Windows consumer section (tucked away on a whole separate section of their web-site) that even Linux enthusiasts who knew about them and went looking for them, found significant difficulties in trying to find them.
        bswiss