Here come Microsoft's Chromebook killers

Here come Microsoft's Chromebook killers

Summary: Sleek and cheap, Chromebooks have been one of the few bright spots in the PC market. Expect Microsoft to fight back quickly.

TOPICS: Mobility, Laptops, PCs

Chromebooks have won fans with their sleek design and low prices, but Microsoft is getting ready to hit back, with makers of Windows laptops already working on cheaper hardware.

Chromebooks sales are growing rapidly: last year's 2.9 million is likely to turn into five million this year, and could triple to 14.4 million units by 2017, according to analyst firm Gartner. The picture isn't all rosy for Chromebooks of course — 85 percent of those sold last year went to the education sector and four out of five of the total were bought in North America. And while stellar growth rates are nothing to be sniffed at, Chromebooks made up a very small proportion of the 315 million PCs shipped last year.

However, the potential threat to Windows remains clear. If Chromebooks really take off in education, it could present a challenge to Microsoft's dominance of the desktop in the long term, as new staff arrive trained to use Chrome rather than Windows, and expect to see the same hardware in the workplace.

As such, Microsoft is working hard to counter the threat by making sure there are cheaper Windows-based options out there. For example, HP's forthcoming Stream Windows 8.1 laptop shares some of the characteristics of a Chromebook, coming in at a wallet-friendly $199 with two years of 200GB OneDrive cloud storage thrown in. 

And there of course are already plenty of cheap Windows laptops already on the market — ZDNet recently looked at Lenovo's B50-30, another laptop coming in at a Chromebook price point (£229 in the UK). And a quick web search shows that Dell is currently advertising a Windows 8.1 Inspiron 15 at $249 (which drops to $209 when a couple of special offers are applied). 

The challenge from Chromebooks is not just about price, of course, it's also about the quality of the experience - and with Chromebooks manufacturers have created a budget device that doesn't feel cheap.

The secret of Chromebooks' success seems that Chrome doesn't put too much pressure on the modest hardware: beyond web surfing, it doesn't expect too much, whereas Windows tends to be more demanding.

As such the big question here will be around how Windows 8.1 can perform on cheap hardware (perhaps if it had taken off, Windows RT could have filled this niche for Microsoft).

On Microsoft's most recent financial earnings call CEO Satya Nadella emphasised how a shift in licensing strategy would help — Windows licences are now free for any OEM building a device under nine inches, and Microsoft has added a low-cost Windows licence, presumably for larger devices, for manufacturers that integrate Bing. "This new offering combined with lower hardware specs means OEMs will bring a fantastic lineup of value-based notebooks and tablets to market this holiday," he said.

You'll see a lot of value notebooks, he said, and you'll see clamshells. For Microsoft it's about the shift to making money from selling services — Bing and cloud storage for example, according to Nadella. "We will have our OEM monetisation, and some of these new business models are about monetizing on the back end with Bing integration as well as our services attach, and that's the reason fundamentally why we have these zero priced Windows SKUs today."

Consumer hardware sales are always driven by price, and Chromebooks have just made that market even more cutthroat. While Microsoft may still be able to generate revenue from low-cost Windows devices, the trickier question may be for the manufacturers — with hardware margins already razor thin, how low can they go?

Further reading

Topics: Mobility, Laptops, PCs

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  • Price is certainly something

    but Microsoft may want to find a way to up the emphasis on Internet Explorer... a third option, beyond Metro and desktop boot, might be to start up in Metro IE mode, and allow some vendors to ship that as the default config.
    • Explorer Book

      I wonder why they there is not going to be an Explorer Book? Would the anti-monopoly people threw a major fit if there was?
      • Just The thought of this made me monumentally sad.

        Why not just a full computer? There is absolutely nothing about a chromebook's hardware that means it could not run a proper OS - chrome just intentionally limits user experience in top of a full powered OS. If my 2008 netbook can run windows 8, virtually anything still taking a charge can.

        Lol 'explorerbooks' I like it!
        • No HDD, minimal storage 16-64Gb, minimal memory.

          As the article said, it is just a browser, so storage can be eliminated, meaning less weight, heat and power. GPU can be minimal. CPU can be minimal. This means less battery gets you further saving weight and cost. The CPU doesn't have to handle as much. Driver support can be limited to immediate hardware and printer support.

          The browser doesn't need much storage space and you don't have to have all the other trappings necessary for a full OS experience.

          It is just lean and mean. And for some people that is sufficient. It doesn't work for me but it will work for many.

          And you can still use Office 365.
          • Lean and Mean

            That is my point exactly. A lean and mean machine to run Explorer and that is it.

            Never thought of it before but ExploerBook does have a nice ring to it. Thanks MarknWill.
          • IE not many good extensions - add-ons

            Unlike Firefox and Chrome, the IE doesn't have many good extensions and add-ons / apps. Many use AdBlocker, to name just one extension.
          • MS and bloggers still don't get it

            MS will keep on losing market share as long as they think Windows 8.x or any similar foolish product is viable.

            The reason they lost marketshare is Windows 8 and the outrageous MS Tax.

            A simple example is Office. Why pay hundreds for a product that's worth les than 15 dollars or free? Kingsoft office does everything MS does and it doesn't cost a cent!

            Where I see MS getting at Google is search.

            Yes Bing search isn't quite there yet, you ask for sledging and its very likely it won't even know what you are talking about.

            Though when you search Images or videos with Bing, it works better than Google's image search! (can't believe I'm saying this). You still get irrelevant results, but the options it shows to narrow the search down are short of revolutionary, and the images or videos are already the no wait time.

            MS has what it takes to knock Google of its heels, though they have to leverage the right product. And Windows is missing the target like shooting in the opposite direction they should focus on.
          • They'd have to do a lot of work on IE.

            IE doesn't have anywhere near the plugins that Chrome has, and additionally IE has nothing like NativeCode where C++ apps can run in the browser at near native speed.

            Besides, if they made an explorer book too good, they'd be worried about stealing sales from actual full windows.. They want to steal chromebook sales, but not Win8 sales, so it'd be a pretty fine line.

            The other disadvantage, is that RT was arm only and Windows 8 is x86 only.. Where as both Android and ChromeOS are available on either. and because they have abstracted the hardware layer on both, most apps will happily run on either arm or Intel chromebooks, (or android devices).
          • WRONG

            My Chromebook has a 360GB hard drive and still boots from a cold start in 15 seconds!
          • Wrong twice

            But it did not cost you $199 either. To start in 15 seconds it needs to have an SSD drive and at 360GB, it should cost you a pretty penny. A regular hard drive does not start in 15 seconds unless is on sleep mode. Of course to just start a browser, 15 seconds is too slow.
          • Why can't a disk start in 15 seconds?

            Mine do.

            Even the 2TB disk is ready in that time...
          • Boot times.

            My Ultrabook boots in about 12 sec. Online or off.
        • Chromebook

          I just installed Linux on a Chromebook for a friend, works fine online and off.
      • This is the route MS should go, and fast

        It's not so much Chrome OS, but if all those school kids and educators get used to using Google docs, that could seriously hurt Microsoft in the long run. They have to give people an alternative eco system early on or they will get entrenched and it will be too late.

        And there's no doubt that the Google eco system will continue to improve so it will be a worthy competitor to everything MS before long. MS should get ahead of this one and be proactive instead of reactive like they have with mobile. Kill the worm before it grows into a snake.
        • Fast and Hard

          Yes, I agree with you that Microsoft should come hard and fast. But I also see educators not providing the education to join the work force. Imagine a graduate student from High School go to collage or join the workforce and asked to perform certain task using Microsoft Office. The poor kid will not know what to do. Every thing is different for him and there is more options to do thing. While the kid that learn using Microsoft Office will know what to do and do it better he will have a clear advantage over the ones that use Google eco system.
    • "start up in Metro IE mode"

      It's a good idea, and I'm sure Microsoft have thought long and hard about it; but they daren't do it, because it would cannibalize sales from the very "Chromebook Killers" that the author is fantasizing about.

      I do think, in time, Apple will come up with something that ALL the bloggers will call a "Chromebook Killer" - but in fact, like iPhone / Android, they'll co-exist, with Apple taking a selected niche, and doing very well thank you.
      • A chromebook killer

        As if these needs to be killed in the first place !
        • MS seems to think so...

          Since they are more successful that the equivalent Windows...
    • What?

      Locked down? Do you know what you're talking about?

      Windows 8.x is smaller & faster than Windows 7. If you don't want the "Modern" UX, just boot to desktop.

      In the end, for the about the same price of a Chromebook, you get a full OS supporting the largest software collection.

      And the added bonus is that it boots even faster than ChromeOS. What an insult.
    • Re: Price is something...

      "sleek design and low prices"

      If that is what Microsoft thinks makes Chromebooks appealing they are certainly missing the point of Chromebooks. Cheap Windows laptops don't even begin to fill the Chromebooks niche.

      It's about simplicity, stupid!