Low-end laptops:The rise of the Chromebook

Low-end laptops:The rise of the Chromebook

Summary: Some people are still in denial about the rise of the Linux operating system with the Chrome Web browser interface, Chrome OS, and its hardware: the Chromebooks. The experts say, however, it's the one segment of the PC market that's growing while everything else shrinks.

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Some Windows experts, such as Paul Thurrott, call Chromebooks a joke. Some industry groups, such as NetMarketShare, claim that they still see essentially no use of Chrome OS. Both need to wake up and smell the Chrome OS coffee. Chromebooks have been selling like hotcakes on a cold morning for  a year now.

chromebooks
Market analysts agree: Chromebooks have taken off in the low-end laptop market while Windows 8.x PCs continue to decline.

Chrome OS, a version of Linux that uses the Chrome Web browser for its main interface, and its main hardware platform, Chromebooks, are actually the one segment of the dying PC market that have actually been growing, according to Stephen Baker, VP of Industry Analysis for Consumer Technology for retail analysis group, NPD Group. "The low-end [computer] market is growing. It's overall positive, everything else is negative," added Baker.

"We expect Chromebooks to continue to have a substantial presence in the entry-level price bands during the holidays," added Baker. "They have consistently accounted for 20-25 percent of the entry-level market for consumer notebooks in 2013 and given the typical consumer (and channel) price sensitivity during the holiday they are very well-positioned to expand that share over the holiday period The significant marketing and advertising support Google is providing its partners is likely to be a key a feature in helping continue to raise awareness of the product and show consumers that it is a reasonably priced alternative to a tablet."

That last point is an important one. Baker sees Chromebooks not just competing with low-end Windows 8.x laptops, but with tablets as well. In particular, NPD sees fighting with Android tablets for marketshare over the holidays.

Before that, Baker said that Chromebooks had sold at an exceptional rate during the back-to-school buying season. This is perhaps one reason why Windows 8's anemic adoption growth rate declined to half of its already usual poor adoption rate in October.

Amazon best seller list was the first to show that Chromebooks were hot with buyers in January when the best-selling laptop was Samsung's ARM-power Chromebook. Ten months later, Amazon's sales list shows Chromebooks are stronger than ever. Four of Amazon's top five selling laptops on November 8th were Chromebooks.

Leading the pack was the Samsung ARM-powered $243 Chromebook again. This was followed by the $279 HP Chromebook 11; the one Windows system, the $459 ASUS Transformer Book T100TA-C1-GR Convertible Touchscreen Laptop; the $249 Acer C720 Chromebook; and its predecessor, the $249 Acer C710 Chromebook. Besides the vendors mentioned above, Lenovo is also selling Chromebooks now.

Rajani Singh, Senior Research Analyst for IDC's quarterly PC Tracker, also has seen Chromebooks gain traction. "In Q3 '13 Chromebooks continued to show some momentum. Right now, adoption in education segment is quite visible, as this segment is very price sensitive and low price points of Chromebook helped in greater adoption. Even retail buyers are also adopting Chromebook. But we need to wait and watch to see if Chromebook volume is resulting from vendor's push or market driven demand. Apart from education and consumer segment, we expect some adoption in small office (mainly) and small biz (some volume) in near future (Q4 '13 and Q1 '14)."

That said, Singh warned, "Chromebooks from any vendor except Samsung have not fared particularly well. Even with Samsung's products, they're primarily only having an impact on K-12 education in the US--as a replacement for aging netbooks. In Q3 '13, Samsung shipped roughly 652,000 Chromebooks Worldwide , of which majority of the shipments (roughly 89 percent) were in the US, recorded at slightly over 577,000 units. Among other vendors Lenovo, Acer and HP have shipped, but in tiny volume. Samsung continues to hold the number one position by shipping majority of Chromebooks inside geographical boundary of the US."

One reason for this, Singh claimed is that, despite Amazon's numbers, "Chromebooks overall are still a tough sell for consumers because there are so few applications available. This is also one of the reasons why, even after such low price points, Chromebook adoption is still slow in non- education segments."

Having said that, Singh concluded, "Chromebook will continue showing momentum, at least in near term, their share will grow but overall they will hold minority share in total notebook space. In longer term, we need to wait and see, if Chromebook demand actually increases or they have same fate as of "netbooks" (strong growth followed by sudden demise). This also depends on vendors, if they are able to come up with upgraded versions of Chromebook that have more features, maintaining the low price points, and some key vendors are working on this."

At the same time, Bob O'Donnell IDC's VP of clients and displays, warns that, "Essentially, the value equation for Chromebooks is the cheapest clamshell form factor notebooks you can buy, but we expect to see some even more aggressive Windows 8-based notebooks that will directly compete with Chromebooks on price and probably represent a better value for most consumers than Chromebooks."

Disgruntled Windows 8.x users might disagree. The market, which saw Windows 7 usage go up in September, seems to have little interest in learning Windows 8. As American Customer Satisfaction Index (ACSI) director David VanAmburg has said, "Microsoft's revamped Windows 8 operating system does not seem to have provided a bounce in sales or in customer satisfaction for these manufacturers."

Say whatever you will about Chromebooks, anyone who's ever used a Web browser can sit down at one and start being productive. The same can't be said of Windows 8.x with its Metro interface. Indeed, Google is working on making it possible to use its Chrome Web browser as a de facto desktop shell for Windows 8.x.

Another problem with low-priced Windows scenario is that Windows overcame the Linux netbooks not because of a new operating system, but by bringing back an old operating system, Windows XP, for next to no cost to vendors. With Microsoft pushing hard to move its own pricey Windows 8.1-powered Surface Pro 2 units a return to this approach seems unlikely.

Research house Gartner also sees good things ahead for Chromebooks. In a report earlier this year, Isabelle Durant, a Principal Analyst in Consumer Technology and Markets, said, that while "The Chromebook standard failed to capture traction at launch, but we are starting to see more interest from consumer, business and education markets. Chromebook vendors like Acer, HP, Lenovo and Samsung should target buyers looking for low-cost, Web-based devices or an alternative to Windows 8." And, indeed, that's just what they've done. 

Last, but not least, forward-looking hardware executives are also seeing further possibilities for Chome OS as a desktop replacement. Jen-Hsun Huang, president and CEO of Nvidia, during the company's third-quarter 2013 earnings call, that while "We have no exposure to Chrome today … it's proven to be quite an important operating system. We have known all along that technologically it is incredibly robust, resilient, and high quality, and now we are seeing quite strong adoptions all over the world. And so this is an area that warrants focus on our part and we will put some energy around it to go see if we can make a contribution in this space as well."

Today, the Chromebook has become a power in low-cost PCs. Tomorrow, we'll have to see, but unless Microsoft is successful in regaining its desktop mojo, it appears that Chromebook and Android tablets will own the low-priced computer user world.

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Topics: Hardware, Enterprise Software, Google, Laptops, Linux, Samsung, Windows 8

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230 comments
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  • Oh well !

    A device that costs between $200 and $350 and the only thing it could do is to run a browser produced by one firm is stupidity beyond imagination. This is a scam.

    As a side note, whatever the NVidia CEO says is a joke... he has been predicting too many things in the last five years and nothing materialised...
    Owl;Net
    • Have you ever used one?

      Really?
      Now be honest, it's not made by Microsoft, and it's not based on IE I know.
      But ever tried using it for a while?
      Somehow I doubt it...........
      Boothy_p
      • Chromebook = lightweight, no fan, does most things

        I find the Chromebook good for travel.

        The Chromebook feather-light laptop that makes my other 'normal' laptop feel like a brick. Why wants to lug around a heavy brick when they travel?

        Chromebook is cool. No fan (at least the ARM model has no fan). Much better battery duration than a Windows laptop.

        Sure, if you need to do video editing, you'll get a heavier laptop or desktop machine. But for what most people do (surf the web, email etc), the Chromebook will do it, and is a more elegant package.
        Vbitrate
        • To surf the web

          I only need a toy and its costs less than $50
          Owl;Net
          • Owl;Net

            We know our a bit simple.

            Have you ever used on?

            It should be a simple question ever for one a limited as yourself.........
            Boothy_p
          • why rant here ?

            go tell your mama- "I only want toys that cost less than $50". Don't forget to mention your age group and that your IQ is very less than normal.
            GrabBoyd
          • Oppinions about this industry...

            ...are so polarized that comments can totally irrational. Selling a few millions Chrome Books does not mean "The rise of the Chromebook". Not even close. People who are buying these devises are also users of other platforms. Windows, Apple, Ubuntu, etc. Buying a computer device today does not make you chained to it. You are still free to buy what ever you want, use it the way what and leave it aside to switch on another platform whenever you want.

            The ChromeBook is just another tool in our computerised daily life. It as nothing to do with religion, profound opinions. I might buy one because they are cheap. It will not be a political move against my Surface, my iMac or my PC.
            gbouchard99@...
          • Unforutnately, it is religion

            You have stumbled into the Holy War of Operating Systems, a religion filled with more hate than the religious wars of the Middle Ages. Facts don't mean much because they are so few and so easily twisted.

            Best bet is to back away, sword drawn, until you reach the safety of your own bunker. Then you may speak common sense where no one will hear you! It's safest that way. If someone hears you, they will draw weapons and clash because you don't believe the same way they do!
            Cynical99
          • fowlnet.

            QUOTE I only need a toy and its costs less than $50 /QUOTE

            Windows costs way more than 50 dollars mate.
            frankieh
        • I like how the article has no numbers

          Has Chrome OS hit 1% yet? I doubt it. I've used it. It was worthless. WebOS with a bigger screen. This coming from a Chrome desktop browser and Android user.

          I'll take my fanless Envy X2 Clovertrail (read Dual core Pentium x86) with a 12 hour battery life and thinner than a Chromebook instead. An Android tablet is more useful than ChromeOS. Actually, even an ipad is more useful.
          LarsDennert
          • ...unless you need a keyboard.

            I think you hit the nail on the head though. The Chromebook is so simple its merely a tablet except it has the experience of a laptop. But that IS the value. It doesn't come with the bloated software, the needless need for virus protection, the endless updates to the OS. That IS the value.
            Marc Ello
          • The keyboard is key

            Chromebooks are much better than tablets for tasks that need a keyboard. A Chromebook is a wonderful portable writing tool - and yes, the word processor part of Google Docs works offline, as does the presentations module. (Spreadsheets, alas, are still read-only offline.)

            Sure, you can lug a Bluetooth keyboard along with your tablet. But that doesn't offer as good an experience as a Chromebook. Microsoft Surface with the Type Cover arguably does but that costs a lot more than a Chromebook. (The least expensive combo is the original RT-based Surface plus the Type Cover, and even now that's nearly $500.) Android and iOS don't have user interfaces that are optimized for use with a keyboard and trackpad.

            You can also buy an ultra-cheap Windows laptop, and it will do more than a Chromebook does. But the ones that you can buy for $200 or $300 won't deliver the level of portability that a Chromebook gives you, nor enough battery life for all day use. A laptop that can match the portability of a Chromebook will cost you a lot more than $200 or $250.
            mark@...
          • A tablet without

            the apps. And everybody shouts how a device with few or no apps can never succeed, because it is missing apps for Facebook or Twitter or Spotify etc. Even with a browser on a desktop, Twitter is much better used through an app than through the browser.

            If a lack of apps is the killer for a new product, why is Chromebook such a winner? ZDNet can't have it both ways.
            wright_is
          • The article have loads of numbers and references

            References from different sources.
            A HP x2 costs 3 times more or so than many chromebooks - that is a good number too ;-)
            AleMartin
        • They all have solid state hard drives.

          That would account for a tremendous increase in battery life also.

          I'd probably install Linux Mint 15, Robolinux or Knoppix anyway, so the argument that's it's a web browser is a moot point. Who cares, you are getting a free OS and not paying the Microsoft tax for a worthless OS. Switching between different Linux OS's is so easy, you never have to play with drivers or activations. Mint takes about 12 minutes to install on a modern computer, probably even faster with Chromebooks because of the SSD.
          Joe.Smetona
          • By a very small amount

            A brief research sadly proves the truth:

            "SSD battery life myth"


            "SSD battery life hoax"
            HypnoToad72
        • "Does most things" is a highly qualified statement.

          From what I have heard, tablets and tablet-like devices are being purchased as "companion devices" for those who don't want to carry their laptop computer when they don't need the power of a laptop computer. Undoubtedly, there is another segment of consumers who don't want or need a computer at all.

          For them, all their device needs to do is surf the Web, read e-mail, play music and movies, take pictures, and create the occasional document or spreadsheet.

          In such a scenario, the choice is a tablet or a Chromebook. (I wonder how ChromeBook sales compare to tablet sales.)
          M Wagner
      • Yes, I have used a friends pixel.

        Not impressed. Having been burned by the netbook fad I have come to realize what these tinker toys are for. If you need to do real work you are going to need a real PC, if you are one of the few that could get by using a netbook then all you are doing is surfing the web and reading email which can be done using a decent tablet which costs a lot less that the Google Pixel.

        Working at Google is in ways is like working for Steve Jobs when he was alive along with his ever present reality distortion bubble. $1200 for a chromebook?!? I am not an Apple fan but if it came down to it I would rather have an MacBook Air for about the same price and have more than twice the functionality of a chromebook.
        balsover
        • Exactly what do you define as "real work"?

          Chrome OS can do office productivity tasks with Google Docs, there are web apps such as WeVideo for movie editing, and there are even web-based picture editing (although, unless you have the pixel, those last two run a bit slow depending on your Chromebook's specs).

          In a way, it kind of irritates me that how most people on here say that everyone needs a PC that powerful enough to play "Battlefield 3", or whatever the hot new game is, when in reality, P.C. stands for "PERSONAL COMPUTER", meaning that not everyone needs the same specs, and I applaud Linux for realizing that.
          Richard Estes
          • RE: Exactly what do you define as "real work"?

            Don't bother asking any of the MS cheering section here that question. It is a mantra they are repeating and they do not even know what it means.

            You can tell these comment posters are a product of Microsoft's marketing program by the half-baked things they post repeatedly, as if they were some mindless drones.

            Real work = what ever your work requires you to achieve. The way you choose to achieve it should be up to you, the individual.

            They think they are cleverly using a crowd mentality to influence that outcome. It seems to me like they took some MS marketing brochure way to seriously and now are a product of this failed strategy.

            As for citing numbers on Chromebook sales that is a bait to bring up the flawed NetMarketShare BS numbers. NetMarketShare is a Microsoft partner with a very flawed methodology and the lowest rated counting tool know in the market.
            InformationRetrieval