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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 Amazon.com, 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 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
quote:
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
quote:
That's never going to happen unless WINE can improve compatibility to actually run more than "most DX9 games".
quote:

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

quote:

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 time...it 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.


"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer














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