Chromebooks and Cheap Windows PCs: It’s War

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In a bid to counter the rising number of Google Chromebooks on the market, Microsoft plans on releasing a series of ultra-cheap Windows laptops near the end of the year.

Hewlett-Packard, Toshiba and Acer will issue laptops priced between $199 and $249 for the holiday shopping season, all with wildly different specs—the Acer Aspire ES1, for example, will feature a 15.6-inch screen paired with a 2.16 GHz Intel Celeron processor, while Toshiba’s unit will boast an 11.6-inch screen. “We are going to participate at the low-end,” Microsoft COO Kevin Turner said during Microsoft’s annual partner conference this week, according to The Verge. “We’ve got a great value proposition against Chromebooks, we are not ceding the market to anyone.”

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Microsoft has good reason for concern: In late 2013, research firm NPD Group issued a report that placed Chromebooks’ share of the commercial notebook market at 21 percent, a dramatic increase from a “negligible percentage” the previous year.  “New products like Chromebooks, and reimagined items like Windows tablets, are now supplementing the revitalization that iPads started in personal computing devices,” Stephen Baker, Vice President of Industry Analysis for NPD, wrote in a statement at the time. PC manufacturers such as HP, perhaps curious to see if customers will gravitate toward hardware running Google’s Chrome OS, have produced Chromebooks at a variety of price-points, a fact that’s likely keeping more than one Microsoft executive awake long into the night.

But in pursuing the lower end of the PC market, Microsoft and its OEM partners set themselves up for a repeat of the netbook debacle of a few years ago. Although netbooks—ultra-cheap, underpowered laptops running Windows—quickly gained immense popularity soon after their release, the form-factor’s market share just as rapidly imploded with the debut of Apple’s iPad in 2010. Many consumers, tired of netbooks’ inferior performance, opted for sleek and light tablets capable of executing all the same functions—Web surfing, light productivity, games and more—at a comparably low price. In mid-2013, research firm IHS iSuppli predicted that zero netbooks would ship by 2015.

Even at the height of netbooks’ popularity, the devices’ low margins ate into manufacturers’ bottom lines. If Microsoft is serious about a new generation of cheap Windows devices, it will need to convince those partners that they won’t end up burned again. For consumers and businesses, though, a race to the bottom will probably mean even more low-cost options to consider.

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One Response to “Chromebooks and Cheap Windows PCs: It’s War”

  1. Steve Wopschall

    I believe that a big reason that The Chromebook is becoming so popular is that it works really well for web based play and work, and requires almost no maintenance. My friends and clients are tired of having to do OS updates, application updates, flash updates, driver updates, etc, etc. They are tired of having to deal with viruses and malware. They simply want a computer that works and doesn’t require much if any attention. The Chromebook comes closer to delivering on this than the PC or Mac. I can hand a friend a Chromebook and tell them what they need to know to keep themselves secure and have them up and running in just a few minutes. And if they somehow mess things up, we can have them running again in just a few minutes, good as new. PC’s and Mac’s do not deliver that experience. The lower price is just icing on the cake.