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Chromebooks currently have a small market share, but new models like the Acer C720P (touch edition) are hot items

Microsoft Corp.'s (MSFT) latest round of attacks on archrival Google Inc. (GOOG) is heating up.  After appearing to pull the plug on the "Scroogled" campaign -- the brainchild of a former campaign advisor to President William Jefferson "Bill" Clinton (D) -- Microsoft brought it back with a vengeance, unveiling a whole line of Google-mocking products ranging from mugs to shirts.

I. Microsoft Calls Chromebooks "Bricks"

Now Microsoft has come back with a new commercial featuring Gold & Silver Pawn Shop, the Las Vegas, Nevada pawn shop that gained a national following via the History Channel's reality TV series Pawn Stars.

Ricky Harrison -- the younger member of the pawn shop's three generation family who specialize in detecting "fake" products -- receives a call from a Microsoft employee who wants to know if a Google "Chromebook" might be "worth something".  Mr. Harrison laughs, responding, "[W]hen you're not connected, it's pretty much a brick."

Okay that's not quite accurate. Chrome OS uses the Chrome browser as the environment to run apps within, however, it does have offline builds of its core apps like Google Docs, and recently gave developers tools to make third-party apps offline accessible.  And while it leverages the cloud, that's not very different from Microsoft's own efforts, slowly phasing out the PC-side standalone Office suite for the cloud-enabled Office 365 app suite.

Chrome OS
Many Chrome OS apps now work just fine offline, contrary to Microsoft's claims.

At the root of Microsoft's argument is a simple assumption Microsoft firmly believes in -- if a laptop or desktop doesn't have Windows 8.1 and Office on it, it's pretty much useless. This is a sentiment echoed by hardcore Windows fans like Windows SuperSite blogger Paul Thurrott, who writes, "Google's Chromebook initiative is a laughable attempt to turn a web browser into an operating system that runs on mostly lackluster hardware."

II. Why Windows Supporters are Scared

Is Microsoft scared of the Chromebook, just trying to be funny, or some combination of both?

Compared to Apple Inc.'s (AAPL) Mac computer line, Chromebook sales appear less than impressive at present.  The Interactive Data Corp. (IDCreports that Chromebooks are only expected to move 3 million units this year, accounting for about 1 percent of the market.  But that figure only covers warehouse sales to brick-and-mortar establishments.  By contrast on some direct sellers like, Inc. (AMZN) Chromebooks are outselling Windows 8.1 laptops.  Approximately 22 percent of school districts across the U.S. have adopted Chromebooks.

Chrome OS
[Image Source: ZDNet]

The NPD Group Inc. estimates that in H1 2013 Chromebooks captured 20-25 percent of the sub-$300 laptop market.  They estimate that 3 percent of laptops (all prices) bought in August-September back-to-school shopping season were Chrombooks.  And with new models out in time for the holidays, NPD Group VP of Industry Analysis Stephen Baker predicts Q4 2013 will be a watershed moment in Chrome OS's market adoption.  He comments:

[Chromebooks] 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.

With Windows 8/8.1 unpopularity riding at all time highs and with consumers opting to avoid high-end hardware in general, PC sales are seeing historic drops.  Microsoft appears less concerned about Apple -- whose sales have also been affected by the latter market trend.  After all Microsoft always prided itself as delivering quality at a budget price, as its past anti-Apple "I'm a PC" campaign illustrated.

In that regard Chromebooks represent perhaps a more serious long-term threat to Microsoft's bottom line.  Generally priced at $300 USD or lower, many of the models offer 7-9 hours of battery life, significantly better than the 4-7 hours that budget-to-mid-range Windows 8.1 laptops get.  Otherwise the hardware spec is somewhat low-end -- but then again so are the specs of budget Windows laptops.

Aside from targeting a market Microsoft took such pride in dominating, Chromebooks also are a headache for Microsoft as they're giving OEMs frustrated with Microsoft's role in poor PC sales an outlet.  One such OEM is Hewlett-Packard Comp. (HPQ).  Is the HP Chromebook 11 a brick?  

HP Chromebook 11
HP Chromebook 11 [Image Source: AnandTech]

Microsoft and Pawn Stars may say so, but AnandTech says otherwise, writing:

Under Google’s influence, HP has built a near perfect example of what an entry level PC should be. It boots fast (< 13 seconds even in dev mode), has a great display, comes with dual-band 2-stream 802.11n WiFi, has good sounding speakers, looks stylish, is light and feels well built. The keyboard is great and even the clickpad isn’t as bad as it is on far more expensive PCs.

You honestly get one of the best examples of a portable machine for $279, and that’s without even relying on the benefits of Chrome OS to help sell the bundle. Anyone looking for a glorified web browsing, email checking, internet terminal will be right at home with Chrome OS. Flash works and you obviously get what’s arguably the world’s best web browser. You don’t have to worry about updates, malware or viruses, all of that is taken care of for you. It’s the modern typewriter equivalent, a true entry level computer, and HP/Google have done an excellent job in bringing this to market.

ASUSTek Computer Inc. (TPE:2357) this quarter became the latest OEM to "cheat on" Microsoft with Chromebooks.  The message from OEMs to Microsoft seems clear -- "If we're not getting satisfaction in this marriage, we'll go out and find satisfaction elsewhere."

And "elsewhere" appears to the Chrome OS.

III. New Touch-Screen Acer Chromebook Wows 

In related news Acer Inc. (TPE:2353) strengthened its already best-selling Chromebook lineup this week with the addition of the C720P -- the touch-screen upgraded variant of the popular C720 which retails for $200 USD (2 GB) and $250 (4 GB), depending on your preference memory-wise.
Acer C720P

For $299 you get a thin (0.78-inch thick) and light (2.98 lb) laptop with:
  • 1377x768 11.6 inch screen with multitouch
  • Intel Corp. (INTC) dual-core 1.4 GHz Celeron 2955U (Haswell)
  • 7.5 hr. of battery life
  • 2 GB DRAM
  • 100 GB of Google Drive cloud storage (free for two years)
  • 12 Free GoGo Wireless in-flight passes
  • 32 GB SSD w/ 7 second boot
  • WiFi 802.11 a/b/g/n
Acer C720P
Acer C720P
Acer C720P

By contrast about the best $300 USD will get you in terms of Windows touchscreen laptops is a Lenovo Group, Ltd. (HKG:0992IdeaPad S210 11.6-inch touchscreen laptop (and that's only when it's discounted 29 percent with a big sale).  

The Lenovo machine comes with slightly more memory (4 GB), but with a last-generation Ivy Bridge processor, the dual-core 1.9 GHz Intel Pentium 2127U ULV.  It's thicker (0.90 in.), weighs more (3.1 lb), has no SSD (instead it has a cheaper 500 GB, 5400 rpm HDD).  
Lenovo Ideapad S210
The Lenovo Ideapad S210 11.6-inch. (w/ Touchscreen, Windows 8.1) sells for $300 USD sale, but only gets about half the battery life of the Chromebook, has no SSD, and has a last-generation Intel processor.

And the kicker? The Windows competitor gets a claimed 4 hours of battery life -- about half what the Acer C720P Chromebook promises.  Well, you know what they say -- if you can't beat them make fun of them.

Windows 8.1 RTm
But Microsoft does offer one unique "benefit" -- Metro UI. [Image Source: CNET]

Feel free to share your thoughts on which budget laptop is "worthless" -- the thin, light, Chromebook with a fast SSD, latest-generation Intel processor, and 7.5 hours of battery life, or the Metro UI-packing Windows 8.1 laptop with more memory (4 GB), but a last generation processor, a slower HDD, a thick/heavier body, and only 4 hours of moderate-to-light use on a full charge. 

Sources: Microsoft on YouTube, Acer [C720P press release]

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RE: Great Point Microsoft
By jimbo2779 on 11/27/2013 5:54:23 PM , Rating: 5
That people seem to forget the huge software ecosystem disparity between Chrome OS and Windows is beyond me.

That such a basic OS that commands just 1% of sales gets so much press is also beyond me.

I'm sure that Chrome OS is a decent OS but lets not kid ourselves that it is a run away success here, it is just starting out for now and no serious work is being done on Chrome OS.

When talking mobile OSes such as iOS, Android and WP writers never go long before lambasting WP for having a poor software ecosystem when it is leagues above when compared to Chrome OS and the lack of system sales is likely going to prevent many devs from developing for the platform.

RE: Great Point Microsoft
By zozzlhandler on 11/27/2013 7:22:31 PM , Rating: 4
1% is through brick and mortar stores. Its more through Amazon and others. But the real killer stat is 22% of school districts using Chromebooks. This is a ticking timebomb. The kids will grow up used to using Chromebooks. How was it that IBM, Microsoft and Apple became popular? Oh yes, it was all the students using them and then taking that familiarity with them when they left school.

And this is for a relatively new product. Given time I think a huge majority of schools will adopt Chromebooks. What school wants to spend its staff time and budgets fighting viruses, installing updates and security patches, fixing software the kids have broken, and on and on. Microsoft *should* be frightened.

RE: Great Point Microsoft
By althaz on 11/27/2013 7:25:45 PM , Rating: 3
Students used mostly Apple computers...and they are a very long way short of being successful in home computers.

Sure Apple is successful, but when Macs were their main source of income, only investment from Microsoft saved them from oblivion.

RE: Great Point Microsoft
By zozzlhandler on 11/27/2013 7:28:57 PM , Rating: 2
Before Apple is was Microsoft. And before that is was IBM and to some extent DEC (we are talking college students here). The strategy of getting students to use your computers has always (so far) been successful.

RE: Great Point Microsoft
By TSS on 11/28/2013 2:28:55 PM , Rating: 3
Familiarity or not the vast majority of students leave school with no knowledge of computers what so ever. It's not that they're stupid or anything, they just don't have any interest in computers or their inner workings what so ever. In the same way the 1-2 kids in a class that are interested in computers, usually aren't interested in sports or the like.

The only threat to Windows is Valve's push to get steam games working under Linux. I've grown up with Microsoft from MS-Dos to Windows 7 and i don't know the first thing about Linux, but i'd still switch tomorrow if only my 150+ games on steam worked on there. And no, i don't feel like dual booting/rebooting every time i want to play a game.

As soon as Steam games work on linux and linux actually gets an (timed) exclusive or 2, kids will start asking their parents for Linux based computers and you'll slowly see Windows's numbers follow those of internet explorer after IE6. But chromebooks, meh. Makes no difference wether you look at cat pictures on a chromebook, macbook or windows laptop.

RE: Great Point Microsoft
By inighthawki on 11/28/2013 4:02:10 PM , Rating: 2
but i'd still switch tomorrow if only my 150+ games on steam worked on there

That's never going to happen unless WINE can improve compatibility to actually run more than "most DX9 games". The solution that SteamOS is going to have is to stream games *from a Windows PC,* so windows is still part of the equation.

RE: Great Point Microsoft
By ResStellarum on 11/29/2013 12:18:16 PM , Rating: 2
That's never going to happen unless WINE can improve compatibility to actually run more than "most DX9 games".

That's not what WINE is for. It's a temporary stop gap while transitioning to native GNU/Linux software.


The solution that SteamOS is going to have is to stream games *from a Windows PC,* so windows is still part of the equation.

No, that's not how SteamOS is going to "Solve" it. It's going to solve it by creating steam machines to compete with the Xbox and Playstation in the living room. And because it's running Linux, games targeting it are automatically targeting Linux on the desktop too. Thus not too far in the future, the disparity between Plaform specific (Windoze), and cross-platform (Linux / Steam OS, Windows, Mac) will diminish.

RE: Great Point Microsoft
By inighthawki on 11/29/2013 4:48:43 PM , Rating: 3
Uhm, this is not what my post is about. He mentioned he would switch to linux after his library of 150+ games worked on Linux. The only way this will happen is through WINE, because no matter how popular SteamBox gets, very few of those games will be ported over.

I don't see how your reply is relevant at all.

RE: Great Point Microsoft
By flatrock on 12/3/2013 8:08:58 AM , Rating: 2
I'm sure schools like the limited software capability of Chrome. It keeps students from loading software that shouldn't be on school computers. If they can lock the DNS to a provider that limits what sites students can browse to, then they have already addressed a couple of the biggest issues.

It makes a lot more sense than the idiotic idea of buying every student an iPad like they are trying to do in Los Angeles, CA.

Maybe I should have bought my daughter a Chromebook instead of an iPad. It would have been half the price and she wouldn't be regularly borrowing my relatively expensive gaming laptop to do her homework with.

I don't think the Chromebook is in any position to replace the Windows laptop for business use. It's gaming capabilities will be severely limited. That still leaves an awful lot of room to squeeze windows out of a lot of the consumer market.

People should however be aware of the serious privacy issues with storing their data in a cloud. I suspect that most consumers really won't care all that much, but the more people that are aware the greater the chance we can get congress to tighten up the privacy restrictions for our data on third party servers.

RE: Great Point Microsoft
By Motoman on 12/3/2013 11:49:31 AM , Rating: 2
The point of going to school is to equip students with skills that will help them when they enter the workforce.

Learning how to use a Chromebook isn't going to do that. Nor is learning how to use an iPad...or a Mac.

Students need to learn to use Windows. Word. Excel.

Like it or not, when you enter the workforce, you're going to be living in a Microsoft world - assuming you're not just flipping burgers. That means any and all time that students spend learning a non-MS platform isn't just wasted puts them at a deficit to others who *did* learn MS. Because they have to unlearn the non-MS stuff and then pick up MS stuff in order to compete.

RE: Great Point Microsoft
By Reclaimer77 on 11/28/2013 12:10:02 AM , Rating: 3
Where did I say Chrome OS was all that great? I'm just pointing out that where they are attacking Chromebooks, requiring connectivity, is retarded.

And if Chromebooks aren't a threat, why spend millions of dollars on this ad? To stop a few Christmas shoppers from buying "bricks"?

It's clear Google scares the hell out of Microsoft, but the negative ad campaign machine focusing on Chromebooks? Really?

RE: Great Point Microsoft
By jimbojimbo on 11/28/2013 1:25:48 AM , Rating: 2
Normally I always disagree with you but you're right here. Why are they so worried about Google everything? They should be going after the company that has been telling lies about them for years, Apple. It's as if Apple can punch Microsoft in the face over and over and they'll just shrink away quietly with no response. After years they get frustrated and start taking it out on Google instead of the real competition. It's ridiculous.
What do most people do with their laptops anyway? Listen to some music, check their email, FB, Twitter, Pinterest, stuff like that? Gee, all of that's available on Chromebook! Also, why is MS so concerned that Google is using targeted advertising but not saying anything about FB, Twitter, or Pinterest? They ALL do. Are they also telling us Bing doesn't pay attention to what we search for to target their advertising?

RE: Great Point Microsoft
By Solandri on 11/28/2013 2:51:56 AM , Rating: 5
Apple and Microsoft are in bed with each other. It all started when Apple was cash-starved and Microsoft was their knight in shining armor and invested $150 million.

Ever since then, the two have been chummy - either cross-licensing stuff, or not suing each other. You'll notice they don't file lawsuits against each other for stuff they rabidly go after in Android.

And I disagree with your premise that Apple is Microsoft's primary competitor. Apple sells to a niche market. (I don't mean that as an insult - they go after a very high-profit niche. But they're content to ignore the huge bulk of the market which wants low-cost products.) Microsoft aims for a broader market (almost the entire market in fact). If you look at which OS also covers the broader mobile market, it's Android, not iOS.

RE: Great Point Microsoft
By Tony Swash on 11/28/2013 6:45:26 AM , Rating: 1
Apple and Microsoft are in bed with each other.

If that was true it's odd that Apple made these

It all started when Apple was cash-starved and Microsoft was their knight in shining armor and invested $150 million.

Actually Apple had over $2 billion in cash at the time. What the Microsoft investment and commitment on Office did was help restore a sense of confidence amongst it's shareholders and thus get them off of the back of Jobs while he got on with a painful restructuring. The investment was PR and the $150 was chump change.

The reason Microsoft is particularly focussed on competition from Google is because Google set out to destroy the very basis of Microsoft's business by giving away software for free. Microsoft's business strategy has always rested on the idea that the bulk of the value in computing is accrued in the realm of software rather than hardware. That is no longer true and the value of software as standalone products, including operating systems, is collapsing. This process, of collapsing the value of software, was pushed the hardest by Google but is now an unstoppable general process in the tech world. In the new tech markets of devices, which is clearly eclipsing the old PC ecosystem in terms of value, growth and business opportunity, almost all the value is accruing to hardware makers and most accrues to the makers of integrated devices. Microsoft's great challenge is to make a successful transition to making large scale profits on integrated devices before, and without accelerating, the decline of it's old standalone software business.

RE: Great Point Microsoft
By bigboxes on 11/29/2013 12:54:59 AM , Rating: 2
Ah, there you are! Tard.

RE: Great Point Microsoft
By abhaxus on 11/29/13, Rating: 0
RE: Great Point Microsoft
By mckinney on 11/30/2013 12:42:26 AM , Rating: 2
Microsoft was their knight in shining armor

Microsoft had to invest in Apple as a matter of self preservation. Microsoft knew in 9 months that the Department of Justice was filing an Antitrust suit against them. MS couldn't allow the closest thing to an OS competitor to fold...even if it was a niche player that was 90% behind them. That was also why Gates also agreed to develop Office for the Mac for an additional 5 years.

MS had to make a ton of cash when they sold the stock.

RE: Great Point Microsoft
By nikon133 on 12/1/2013 4:40:42 PM , Rating: 2
I'd say it is pre-emptive move, rather that scare. As in, undermine potential competitor before it gets strong.

Kind of common practice, I'd say. Google is doing the same with Windows Phone, by not releasing Gmaps and YouTube apps on platform, but at he same time preventing MS do release full featured apps on their own. And MS is preventing 3rd party browsers on RT/Modern GUI. They will all do much as they can without being legally nailed for that.

Re Chromebook, I honestly don't see it as competitor to Windows PC. At best, it is competing with ARM tablets. What can you do on Chromebook that you cannot with keyboard-dock equipped tablet? And, thanks to apps library, there are still plenty of thing you can do on tablets that you cannot do on CB.

And then, there's a selection of free Linux distros for Windows alternative seekers, as well as OSX on high-end. Where does CB fit?

RE: Great Point Microsoft
By Solandri on 11/28/2013 3:08:37 AM , Rating: 3
It's clear Google scares the hell out of Microsoft, but the negative ad campaign machine focusing on Chromebooks? Really?

You have to understand that Windows is Microsoft's lifeblood. If Windows gets dethroned, not only do they lose 30% of their revenue, they also lose the 30% of their revenue which comes from Office (unless they swallow their pride and make a version of Office for iOS and Android), and they lose their leverage over the computer market.

If you look at the PC-alternatives out there, the phones and tablets are really made for content consumption. They're not really suitable for content creation. Sure some people hook up a bluetooth keyboard and mouse, but they're a tiny minority. When you need to write a paper or do some accounting, you'll still pull out your Windows PC (except the 5% of people who use Macs). While conceivably in the distant future iOS or Android could supplant Windows, they don't really have a chance in their current form.

Right now, Chromebooks are what let you replace the Windows/Office hegemony for content creation. So Microsoft has correctly identified it as their biggest threat. I think Google is nuts for making a computer which practically requires network connectivity, and really doubt Chromebooks will ever gain more than a 5%-10% market share. But Microsoft can't afford to take that chance.

RE: Great Point Microsoft
By Guspaz on 11/28/2013 11:05:41 AM , Rating: 2
If Windows gets dethroned, not only do they lose 30% of their revenue, they also lose the 30% of their revenue which comes from Office (unless they swallow their pride and make a version of Office for iOS and Android)

Microsoft already makes a version of Office for iOS and Android. They're currently pretty basic, clearly designed for making minor edits to existing documents rather than full-up content creation (and they require a 365 sub), but they exist, and they're out there. There's also the web version of Office 365 that can be used on tablets. The rumour is also that if Elop becomes CEO, they'll probably do full-up versions of Office for iOS and Android.

RE: Great Point Microsoft
By ResStellarum on 11/29/2013 12:25:47 PM , Rating: 1
When you need to write a paper or do some accounting, you'll still pull out your Windows PC (except the 5% of people who use Macs).

I won't. I'll either dock my tablet or use my GNU/Linux desktop machine. Windows is obsolete.

RE: Great Point Microsoft
By JediJeb on 12/1/2013 10:07:10 AM , Rating: 2
I will agree here, if I am not at work where Windows is the only option, I will use Libre Office. Why would I want to pay for MSOffice and its 500 tools/options I never use.

Honestly even in the Windows environment I mostly only use Wordpad when writing something.

RE: Great Point Microsoft
By Reclaimer77 on 11/29/2013 12:28:43 PM , Rating: 1
Google should really blow up Microsoft's skirt and update ChromeOS to run Android apps in a slick way.

Why not?

RE: Great Point Microsoft
By lwatcdr on 11/28/13, Rating: 0
RE: Great Point Microsoft
By Argon18 on 11/29/13, Rating: 0
"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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