Demand for laptops soared to record levels in 2020, driven by the work-at-home and school-at-home requirements brought on by the COVID-19 pandemic. Notebook sales rocketed past 200 million in a year, a record-breaking 22.5% year-over-year increase, according to market intelligence firm TrendForce.
Microsoft should be celebrating. But look closely and you’ll find a disturbing trend for the company: Chromebook sales went sky-high last year, with nearly 30 million purchased. That represents 74% year-over-year growth and comprises 15% of notebook market share — eating into Microsoft’s share of the important segment. TrendForce notes: “Due to the rapid growth of Chromebooks in 2020, Windows’ [notebook] market share dropped below 80% for the first time ever.”
The firm goes on to predict that Chromebook sales will continue to grow at a faster rate than Windows notebooks, with Microsoft’s market share dropping to perhaps 70%, and Chromebook’s rising to 20%. (The remainder will go to Apple laptops.)
That means hundreds of millions of dollars a year are at stake with Microsoft’s upcoming release of Windows 10X, a Chrome-like operating system that Microsoft is betting will be a Chromebook killer.
Can it really do that, or will it be just another in a long line of failed Microsoft attempts to build a lightweight version of Windows for mobile devices?
A look at Windows 10X
To help figure that out, let’s take a look at Windows 10X. It’s a streamlined, drastically stripped-down version of Windows 10 with a Chromebook-like simplicity. There’s a basic Start menu with icons representing web apps and Windows 10 apps. No live tiles, no extra frou-frous. The Taskbar is streamlined as well, with centered, pinned icons for webapps and Windows 10 apps. There are no notification icons at the far right as with full-blown Windows 10, and no right-clicking for customization.
What you see is what you get.
A similar ethos pervades every aspect of the operating system. It won’t run legacy Windows applications — in other words, the apps you normally run from the desktop like Office. There’s no true file manager, just an extremely limited file browser built for OneDrive.
Mark Hachman / IDGIn short, everything about Windows 10X has been built for the cloud, just like Chromebooks. You’ll mainly run web apps on it, just as you do on Chromebooks. And you’ll run them on the Chromium-based Edge browser, which should mean that any web app and browser extension that runs on a Chromebook will be able to be run on a Windows 10X notebook.
Windows 10X, however, will also run what Microsoft used to call Metro apps, and other points called Windows Store apps and Modern apps, which now are simply called Windows apps. These are the apps built into the full-blown version of Windows 10, such as Mail, Weather, Calendar, and so on.
That sounds like a selling point. But it’s not. These kinds of Windows apps are typically woefully underpowered and badly designed. No one in their right mind would buy a Windows 10X device rather than a Chromebook just so they can run a Windows app.
At some point, Microsoft is expected to let Windows 10X run traditional desktop apps in containers. But why bother? They’ll likely run painfully slow on the kind of low-end hardware Windows 10X notebooks will have to be if they’re going to compete with Chromebooks.
And that gets to the crux of the painful choices Microsoft and its hardware partners will have to make with Windows 10X devices. Are they willing to compete on cost, selling them for as little as $300 or even less? Or will they build the devices with more powerful hardware and charge a premium?
If they go only the premium route, I expect Windows 10X devices to make little to no headway against Chromebooks. Chromebooks are ubiquitous in education, and few, if any, school systems will be willing to pay several hundred dollars more for a Windows 10X device than for a Chromebook.
A cautionary tale for Microsoft
In Cambridge, MA, where I live, the school system is well-funded because the many tech and biotech companies here provide a solid tax base. In order to shrink the digital divide, the school system provides every child from K-12 with a free Chromebook. That’s more than 7,000 students. If a Windows 10X device cost $200 more than a Chromebook, the local school system would have to spend an added $1.4 million for student notebooks. And that means it would have $1.4 million less for all the other important things it needs to do. There’s no way schools would throw money away like that — and Cambridge has a reasonably funded school system. Many school systems don’t have nearly as many resources; they’d be even less likely to pay more for Windows 10X devices than for Chromebooks.
It’s not just school systems looking for simple, inexpensive cloud-based notebooks. So are parents. And so are people who work at home.
Mark Hachman / IDGI’m a good example. Recently I had to send an old Windows laptop to the great PC graveyard in the sky. I was looking to replace it with one that would primarily be used for Zoom meetings. I was highly unimpressed with the inexpensive Windows notebooks available, which typically skimp on screen size and quality or RAM. I wound up buying a solid, well-built Samsung Chromebook with a good 15.6-inch screen and 4 GB of RAM for $300. It’s ideal for Zoom meetings and word processing using Google Docs or the online version of Word. It does exactly what I need at a good price.
Chrome is such a lightweight operating system that 4 GB of RAM is sufficient for anything I plan to do on my Chromebook. If Windows 10X can run fast using only that much memory, it will have a shot at success. But if Microsoft and its partners decide to stuff Windows 10X devices with higher-end hardware and enough RAM to run desktop Windows 10 applications, it’s hard to imagine many people will buy them.
If we lived in the age of one-time Microsoft Steve Ballmer, there’s no doubt the company would go the high-end route in the arrogant belief that people will pay a premium just to have the Windows name on a notebook. And Windows 10X would crash and burn. But this is now the age of CEO Satya Nadella, so it’s possible Microsoft might be willing to compete on value and price.
Even if Microsoft does that, Windows 10X will have an extremely hard time competing against Chromebooks. But at least it would have a shot at regaining some market share, though it wouldn’t likely overtake Chromebooks in the education market.
If instead it goes the higher-end route, look for another Microsoft flameout with a mobile version of Windows.