Chromebooks: A bright spot in the dark PC market

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.
Written by Steven Vaughan-Nichols, Senior Contributing Editor

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.

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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