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One in five notebooks sold is now a Chromebok, Microsoft appears desperate to beat Google back

Seemingly out of nowhere Google Inc.'s (GOOG) Chrome OS -- a Linux-kernel based personal computer operating system -- has emerged as a dominant force in the PC market.

I. At Last a True Challenge to the Windows PC Hegemony

According to market share data from the NPD Group Inc. -- a top market research group -- this year has been a rough year for Apple, Inc. (AAPL) in terms of market share, and a mixed year for Microsoft Corp.'s (MSFT) Windows platfrom.  2013 was a year of unbelieveable growth, as Google's Chrome OS-powered "Chromebooks" emerged as the first compelling mass-market Windows alternative on the budget end in decades, inheriting the legacy of the netbook.

Between Jan. and Nov. 2013 Chromebooks accounted for 9.6 percent share of U.S. sales of all tablets, notebooks, and desktop personal computers combined.  On a year-to-year basis Chromebooks grew 47-fold in sales, a mind-boggling explosion.

That number contrasts harshly with Apple, Inc.'s (AAPL) laptop market share trends, which saw a drop from 2.6 to 1.8 percent in the traditional PC market (notebooks + desktops).


Chrome OS
Chrome OS is posting incredible growth.

 

While tablets continue to fill an increasing role in Americans' electronic lives, both in terms of work and play, the traditional PC (notebooks, desktops) is as relevant as ever in 2013.

Apple was never able to muster a true challenge to the coalition of Windows PC OEMs (at least with regards to market share), leaving Windows free to enjoy hegemony of this crucial market for years.  By contrast Chrome OS seems to have broken through, with Chromebooks now accounting for roughly one in five laptop sales this year.  Key to this surge has been support from OEMs that were once Windows exclusive or nearly Windows exclusive.


HP Chromebook 11 ($279 USD)

 


America's Hewlett Packard Comp. (HPQ), South Korea's Samsung Electronics Comp., Ltd. (KSC:005930), and Taiwan's Acer, Inc. (TPE:2353) have all rode the Chromebook wave to resurgent notebook sales, amidst the slump in Windows PC sales.

With Chromebooks single-handedly driving personal computer growth and Apple and Microsoft sinking in market share, other OEMs are eageryl jumping on board the Chrome OS train.  ASUSTek Computer Inc. (TPE:2357) and
Toshiba Corp. (TYO:6502) are planning 2014 Chromebook launches. 

Lenovo ThinkPad

Both Dell Inc. and Lenovo Group, Ltd. (HKG:0992) have announced education-geared Chromebook models (the Dell Chromebook 11 and the Lenovo ThinkPad x131e).  These models are expected to be joined by consumer-aimed models in 2014.  From a big picture perspective, this marks the first time in over two decades that every major Windows PC OEM has backed an alternative platform.

Notebook market shareLaptop sales; Jan.-Nov. 2012/2013 [Data Source: NPD Group]

While iPads -- Apple's biggest "PC" product -- are still outselling ChromeBooks 3-to-2 in the "PC" market, ChromeBooks are outselling Apple roughly 5-to-1 in the U.S. market.  Together 3 out of every 4 PCs sold (approximately) still run Windows.  But of the sales on alternatively platforms, Google controls 5 out of every 6 PCs sold, roughly.

II. U.S. Tablet Sales -- iPad Still King; Windows, Android Give Chase

The iPad's share of the PC market also fell from 17.1 percent to 15.8 percent, cannibalized by Chromebooks and Android tablets.  The fall might have been worse, had it not been for Apple's decision to produce a 7-inch tablet.

Steve Jobs -- Apple's late cofounder and CEO -- infamously remarked in Oct. 2010 at the All Things D conference keynote:

The reason we wouldn't make a 7-inch tablet isn't because we don't want to hit a price point, it's because we don't think you can make a great tablet with a 7-inch screen.  The 7-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad.  [Increasing screen resolution on small devices is] meaningless, unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of the present size.

There are clear limits of how close you can physically place elements on a touch screen before users cannot reliably tap, flick or pinch them.  This is one of the key reasons we think the 10-inch screen size is the minimum size required to create great tablet apps.

Yet in Oct. 2012 Apple produced just such a "tweener" tablet, which its founder had condemned as inferior.  And the market proved Mr. Jobs was entirely wrong.


iPad mini with Retina Display

In tablets Apple also appears to be losing its edge in unit sales in the U.S., the world's most lucrative market.  Both Windows 8.x and Android tablets gobbled up part of the iPad's dominant U.S. market share in 2013, with Windows tablets being the biggest gainer.  Nearly 1 in 10 tablets sold now is a Windows tablet in the U.S.; nearly 1 in 3 is an Android tablet.

Globally Android tablets have passed the iPad, so take these numbers with a grain of salt, although they are meaningful given the U.S remains one of the world's highest margin markets, and trails only China in volume for personal electronics.

2013 Market ShareTablet sales; Jan.-Nov. 2012/2013 [Data Source: NPD Group]


In the tablet market Microsoft, Apple, and Google can all find positive signs in U.S. sales numbers.  For Apple, it may have fallen a bit, but it still controls roughly 6 out of every 10 tablet sales in the world's most lucrative market.

For Microsoft, it's the fast growing market player, even if it still controls less than 1 out of every 10 tablets sold.  For Google steady growth is slowly lofting it towards seizing the sales crown in the tablet market, as it already did internationally in 2013.

III. Desktop Sales -- Still Stronghold for Microsoft

The NPD Group numbers did not break down desktop sales by platform.  While desktop sales (8.5 percent growth) trailed in year-to-year growth versus laptop sales (28.9 percent growth) and tablet sales (49 percent growth) they still represented more than 1 in every 4 devices sold.

PC sales
Desktop PCs still remain a relevant, if a bit diminished market force. [Data Source: NPD Group]

In terms of OEMs HP leveraged its mix of Chrome OS and Windows product to remain #1 in global PC sales.  Meg Whitman's leadership is quietly transforming a company that nearly self-destructed under the suicidal, dysfunctional tenure of Léo Apotheker.

PC market share

Samsung -- which regularly vies with Apple for the top spot in the U.S. smartphone market -- used its impressive Android tablet and Chromebook lineup, along with a lighter mix of Windows product, to seize fourth place.  Its sales grew nearly six-fold.

Lenovo -- second place in terms of U.S. PC sales by OEM -- remains the strongest OEM not to have yet decisively jumped on the Chrome train.  Apple, meanwhile, took third place, largely on the merits of its iPad "PC" sales.

LG Electronics, Inc. (KSC:066570) -- an OEM who hopes to follow Samsung's rise to power in the U.S. market in 2014 -- perhaps gave us a taste of things to come, showing off a Chrome OS powered "Chromebase" desktop PC last week.



Expect "Chromebases" to battle Windows desktops in 2014.

 
The pricey Mac Pro and budget iMac lines have never posed a serious threat to Windows desktop sales.  Could Chromebases in 2014 follow in the line of Chromebooks' dramatic 2013?  We'll just have to wait and see.

Source: The NPD Group



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RE: Impressive growth in Chromebooks
By troysavary on 12/26/2013 7:29:34 PM , Rating: -1
quote:
Also Netbooks didn't fail, they were just replaced by tablets. What, exactly, is going to replace the laptop form factor?


Seriously? Sales falling like a rock isn't failing? Netbooks only sold well for a very short time. Comparing them to VCRs, which sold well for almost 2 decades is inane, even by your standards.

quote:
What, exactly, is going to replace the laptop form factor?


Where did I say that anything was going to replace the laptop form-factor. I'm predicting that people will be sticking with Windows laptops for the most part, not that laptops are going away. You are arguing against something that I didn't even say.

MS is not in trouble because Chromebooks had a good year. That is all I am trying to say. One year is not a trend. We have to wait at least 2 years to know if Chromebooks will have staying power. If they are not selling well next year or the year after they are nothing more than a temporary lull in Windows sales.

Funny you think the iPad is niche but Chromebooks are not niche when the iPad has a bigger share of the tablet market than Chromebooks have of the laptop market. Chromebooks sales figures are higher than I expected. I was wrong there, just as you were wrong in your Xbox One sales predictions. But I predict it is a short lived fad. Maybe I'll be proven wrong. After all, I expected the iPhone to be a failure when it first launched. But that doesn't change the fact that it is too early to declare the Chromebook a long term success.


RE: Impressive growth in Chromebooks
By Reclaimer77 on 12/26/2013 7:46:44 PM , Rating: 2
quote:
MS is not in trouble because Chromebooks had a good year.


Who said they were? Wtf...

quote:
But that doesn't change the fact that it is too early to declare the Chromebook a long term success.


Who said the Chromebooks were a long-term success? Besides you, nobody has attached a time limit to these numbers. They are what you are.

Man your post is just h8h8h8h8h8 lol.

quote:
Funny you think the iPad is niche


Uhhh where exactly did I say that? Wtf.

I know I've said the iPhone is in danger of becoming a niche product due to marketshare. But I can't recall saying that about the iPad.


RE: Impressive growth in Chromebooks
By troysavary on 12/26/13, Rating: -1
RE: Impressive growth in Chromebooks
By Reclaimer77 on 12/26/2013 8:25:19 PM , Rating: 2
And so if Chromebooks are just a fad, you don't have to go through the painful process of admitting you were wrong, and Google can be a success in an entrenched market.

Gotcha.

I guess we'll all just wait your arbitrary two year cutoff date to find out! LMAO dude, you're awesome.


By troysavary on 12/26/2013 8:48:40 PM , Rating: 1
Yes, if they are a fad, then I will be right. If they are still selling well they will not be a fad. Why is that concept beyond your grasp. If they turn out to be a fad, they fill be just a footnote in computer history. You are so married to Google that you see everything as criticism against Google. If Apple made a SafariBook or Microsoft made an IEBook, I'd be saying they were a fad too. I think it is too limited to have long term success. I don't care in this case who the maker is. I don't think ChromeOS has staying power. I don't think the actual devices offer much for the price. I think 16 GB of storage is a useless amount in a phone these days. It is beyond pathetic in a laptop, even one that is expected to be connected all the time.


RE: Impressive growth in Chromebooks
By troysavary on 12/26/2013 8:36:33 PM , Rating: 2
quote:
Who said they were? Wtf...


I am sure Argon18 probably did at some point :)


By Cheesew1z69 on 12/28/2013 9:34:35 AM , Rating: 1
And he is complete moron which no one takes seriously.


RE: Impressive growth in Chromebooks
By Argon18 on 12/30/2013 9:29:17 AM , Rating: 2
"I am sure Argon18 probably did at some point :)"

No I didn't. But don't fret, I am now. :) Microsoft is indeed in trouble is ChromeOS continues on this trend. It's obvious really. Your average consumer doesn't give two craps about Microsoft Windows or Office.

Joe/Jane consumer wants a laptop to do social media (Facebook, Twitter, Instagram) online shopping (Amazon, walmart, etc) and online banking / bill-paying. That's it. If they can do those three things, and the machine performs well enough and is easy enough to use, that's all they care about. Nothing else.

The reason the Netbook fad died out was hardware specs. In order to meet a price point, they were so stripped down they performed like crap and they felt cheap and junky. Chromebooks look and feel like a normal low to mid range laptop computer. And they do everything the consumer wants, with great performance.

Microsoft should be very nervous if ChromeOS continues this current sales trend. Nobody cares about Linux on the desktop any more, because nobody uses desktops any more. Desktops are a niche market nowadays. The laptop is sales king, it is what all average consumers are buying as their primary computer these days. And if ChromeOS suits their needs, which apparently it does, then Microsoft's relevance in the consumer market will looks a lot like Blackberry's...

Of course the Wintards will not agree, but it's hard to see reality when you're sipping Redmond flavored kool-aid.


RE: Impressive growth in Chromebooks
By Cartman Jones on 12/27/2013 6:23:26 AM , Rating: 2
quote:
MS is not in trouble because Chromebooks had a good year


Actually, Mick said MS "appears desperate", so the implication was in the article.


By Reclaimer77 on 12/27/2013 9:38:31 AM , Rating: 2
That doesn't mean MS is in "trouble". But they are clearly threatened by Chromebooks and Google in general. They're spending serious money running a negative ad campaign about them.

I don't see where Mick implied Chromebooks were going to topple the MS empire or something.


"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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