Here's why Chromebooks shouldn't really worry Microsoft...yet

With Dell, HP, and Lenovo all with notebooks ready or in the works, you might think that Microsoft is under siege. Yet there's reason to believe that Microsoft isn't least, for now that is. But should it be?

The latest big PC vendor to announce a Chromebook is Dell, which will ship an under-$300 11-inch Chromebook next year with some very nice specs for such a low price, including a latest generation Intel chip,16 GB solid state drive, 720p webcam, a battery rated at 10 hours, and plenty of ports.

HP, Lenovo, Acer, Samsung, and others have also released Chromebooks, which typically sell for under $300. They're selling well. As I write this, the top two sellers in notebooks on Amazon are Chromebooks. And Stephen Baker, a retail analyst with the NPD Group, told Computerworld that "They account for about a quarter of the under-$300 [notebook] market in the U.S."

All that sounds reason enough for Microsoft to worry. And Microsoft has launched an anti-Chromebook campaign in which the heroes of the reality show "Pawn Stars" trash the devices, and say that a Chromebook is "not a real laptop."

But Microsoft shouldn't worry...not yet at least. In the short run, Chromebooks are no threat. Take a look what Baker said about them, that they account for about 25% of the sub-$300 notebook market. That's not where Windows machines really play. And Baker added that Chromebooks "will continue to incrementally gain share, but compared to the full PC market, they're not ready to be mainstream." He believes that for now they're taking market share away from tablets rather than Windows-based computers

That's today, though. Next year and beyond, that might not be true. With all the big PC makers making Chrome-based devices, there's no reason to expect that they'll stay with making small, under-$300 notebooks. They will likely start making larger Chrome-based laptops and desktops as well. Baker notes:

"It's all part of the general activity of the PC OEMs. OEMs can't sit back and depend on Wintel anymore. They're using AMD processors, they're using ARM processors, they're using different OSes."

As evidence that hardware makers are looking to produce Chrome PCs, LG Electronics has announced a Chrome-based PC called Chromebase with a a 21.5-inch widescreen monitor. When big hardware companies start releasing Chrome PCs to compete with full-blown laptops and PCs, it will be time for Microsoft to worry. And it looks like that time is coming soon.

Copyright © 2013 IDG Communications, Inc.

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