Should the lowly Chromebook — once a laughing stock of the PC world — have Microsoft worried?
Google first announced its Chrome operating system back in mid-2009, before shipping the first Chromebook laptops with the software preinstalled two years later. At the time the idea of just a web browser for an OS seemed confusing to many, coupled with Google's promise to target netbooks without the necessary functions and features. Nevertheless, Google shipped a developer device in late 2010 and the initial Chromebooks from Acer and Samsung went on sale in June and July in 2011 at $349 and $299 respectively. They weren't huge sellers, but recent models could change that, and a new addition from Lenovo appears to strike at the core of Microsoft's Windows and Office empire even further.
Lenovo aside, other Chromebook manufacturers are starting to see success. Samsung introduced its Series 3 Chromebook in October alongside Acer's C7 version in November. Both are priced extremely aggressively at a time when Microsoft's OEMs are also releasing pricey touch-based Windows 8 machines. Samsung's Chromebook is available at $249, while Acer's can be found for just $199. The pricing seems to be working. A quick look at Amazon's best selling laptops in the US shows a Samsung Chromebook at number one, while the Acer takes spot number two in the UK with the Samsung in eighth place.
Aggressive pricing and marketing is a deadly combo
Aggressive pricing has also been combined with aggressive marketing from Google. "The new Chromebook, for everyone," is the latest blitz that's aired regularly in TV ad slots. The ads don't show exactly how the OS works, but they're targeted at the price conscious consumer with "the $249 laptop from Google" conclusion. Chromebooks could be considered by many as the latest netbooks, a low-cost laptop that soared in popularity between 2007 and 2010. The poor performance, tiny keyboards, and small low-resolution displays led to a frustrating experience for many, but if Google is successful in targeting consumers with cheap and speedy Chromebooks then this may undermine Microsoft's Windows offering. With web apps becoming a more legitimate option for many people than they were in 2009, a browser-based OS doesn't seem as crazy as it once did.
Lenovo joins Google's battle against Windows and Office
Lenovo is the latest OEM to join the Chromebook family with its ThinkPad X131e. It's a rugged device designed exclusively for the education market, but Lenovo's decision is significant. A "get them while they're young" approach from Google is part of a bigger play by the company to target Microsoft Office with its Google Apps offering to ween the world off of its dependency on Office. Lenovo is one of the world's largest PC manufacturers, so any minor shift in direction must worry Redmond.
Microsoft's reaction to Chromebooks has been rather muted. Steve Ballmer famously laughed at the idea of Chrome OS, asking "who knows what this thing is?" when it was originally introduced. However, Ballmer has mocked Google before, claiming you need to be a computer scientist to use an Android phone. He also laughed at the idea of Apple's iPhone, citing the high cost of the phone and lack of physical keyboard. If HP, Dell, and others start to eye Chromebooks in 2013, like Lenovo has this week, then that may trigger alarm bells for Windows at a time when PC sales continue to decline.
Chromebooks are still a very niche offering, but Microsoft's Windows RT OS with reportedly high license and hardware costs isn't at a point where it can counter a bargain-priced Chromebook. The software giant may have showed off ARM-based notebooks back at Computex 2011, but the small number of Windows RT devices right now are touch-based tablets or convertibles. Still, if Microsoft is able to ship a low-cost Windows Blue update to its OEMs midway through 2013, then it could halt Chrome OS before it starts to gain popularity. Otherwise, Google may have the last laugh over the notebook market, just as Apple has with the iPhone and Google with Android.