Microsoft should worry about Chromebooks as much as it worried about Linux desktops
[Update: the rumors were true -- HP unveiled a 14-inch Chromebook, the biggest yet, for $349 on Feb. 4.]
At the same time, Acer president Jim Wong told Bloomberg that Windows 8 is "not successful" yet, but that it's seeing suprising traction with Chrome devices, and is thinking of expanding its lineup.
It’s easy to look at these new Chromebooks as doom for Windows. But history tells us that it’s more likely that this is another example of OEMs turning to Linux, with little success, in part as an expression of unhappiness with Microsoft.
Remember when Dell started making Linux machines and selling them at WalMart? They weren't a ringing success.
Then there was the netbook craze, which started with the Linux-based EeePC. Within a couple years, Microsoft had utterly conquered that market -- before netbooks fizzled out entirely.
Part of the reason is that people are accustomed to using Windows. Dell once said that it was getting higher rates of returns on Linux netbooks because people thought they were buying low-cost Windows machines. Once they started up the machines and found an unfamiliar interface, they returned them.
Lack of familiar applications and support for hardware peripherals are other reasons why the Linux desktop never reached a broad audience.
Times have changed a bit since then. People are more used to different operating systems because of the variety of non-Windows smartphones and tablets that have become widely used. That may give Chromebooks a leg up over past attempts at pushing Linux out to the masses. Plus, Google is pushing Chromebooks to businesses and schools, citing them as a low-cost, highly secure way of accessing web apps -- like Google's own suite. Plus, thanks to its strong online advertising business, Google is a lot better funded than the companies that tried to push Linux during the last decade. The company earned more than $2.7 billion in profit last quarter, and has more than $48 billion in cash on the books. If it wants to make a play for the low-end of the PC market, Google certainly is well-positioned to do so.
But given the history of attempts to popularize Linux PCs, it’s more likely that Chromebooks will remain a niche machine. People will experiment with them, but unless they're ready to go 100% web, and live without support for popular peripherals, they'll probably remain an early-adopter product with traction in some niches.
Meanwhile, Microsoft is learning from Google's example and increasing the emphasis on Office 365, its online version of Office and related products.
That's not to say that Windows is sitting pretty. The biggest is the tablet trend, which is dominated by Apple with a growing threat from Android. Non-Windows tablets are a fast-growing market -- Apple sold more than 22 million iPads just last quarter, up almost 50% from last year. That's a far bigger threat to Microsoft than Chromebooks.
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It's designed for the 3.5 billion people who have feature phones today. It solves technical problems Google is not interested in and is a better fit for the pre-paid phones popular in developing countries. The only trick is getting developers on board.
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