Given the huge popularity and rapid growth in the tablet market, it is easy to overlook the fact that it is still possible to buy laptops and notebooks! Every single vaguely technology-related television commercial seems to feature people using tablets to surf the ‘net and purchase products, but for many people a tablet computer doesn’t really serve their needs and actually has no real purpose for them.
Originally, laptops and notebooks came to the fore because they offered the functionality of a desktop machine, with the convenience of a mobile device. Today, perhaps notebooks don’t look quite so mobile next to a tablet or, obviously, a smartphone, and they certainly don’t carry that all-important street cachet which can dictate the future of any form of technology.
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
But there is still a place in the computing marketplace for notebooks, particularly for those people who need to do work on the go, and require a stable keyboard in order to do it. While tablets offer the ability to connect keyboards via Bluetooth, this is often inconvenient and can be considered a poor substitute to a dedicated keyboard.
Surge in Google’s Chromebook sales
The desire of consumers to still buy into notebook technology has been demonstrated by the commercial success of a machine that has perhaps been discounted to some extent by the big players in the mobile market. Google Inc (NASDAQ:GOOG)’s Chromebook enjoyed a surge in sales over the last year, and has seriously eaten into Microsoft’s market share. Google now accounts for 21% of notebook sales in the US, and its Chromebooks comprise 10% of all computer and tablet sales, no mean feat for a device that many had written off.
The latest sales figures for Google, which have been contributed by the NPD Group, really do represent a sea change in the marketplace, as it is only one year ago that devices which are running Chrome OS, Google Inc (NASDAQ:GOOG)’s patented operating system, made up only 0.2% of the market. But it is thought that the price point at which Google have introduced the Chromebook into the marketplace – the Google notebook retails at around $200 – has contributed greatly to its recent success, offering the affordability and budget element of the tablet, while still retaining some critical functionality that tablets sometimes fail to deliver.
Amazon reveals Google’s best selling Chromebook
In addition to the growth of the Chromebook, the key retailer Amazon.com, Inc. (NASDAQ:AMZN) has also revealed that Chromebooks comprised two of the three best-selling notebooks over the Christmas period in the United States. Over the same period analysts described the sales of Windows-based notebooks as being tepid, and it is clear that this marketplace that has typically been dominated by Windows devices is now becoming more diverse.
This is reflected by some very alarming news for Microsoft. Its own selection of notebooks have fallen in sales by 21% over the calendar year. With the XBox One possibly not selling as well as hoped, and certainly in second place in the console battle to Sony Corporation (NYSE:SNE) (TYO:6758)’s Playstation 4, and this particular sector which was once utterly dominated by Microsoft Corporation (NASDAQ:MSFT) clearly becoming open to new competitors, it was not the merriest of Christmases for the software giant.
Nonetheless, a company of the size and prominence of Microsoft Corporation (NASDAQ:MSFT) is hardly going to be wiped out easily, and it still retains a massively significant, and dominant, share of the notebook market. But Google Inc (NASDAQ:GOOG) is used to huge success in virtually every field that it enters into, so what are the prospects for Chromebook in 2014? Can it continue its rapid ascent and grab even more market share?
The first thing to note is that this particular report focuses on businesses and public sector institutions, not consumer spending. A full impression of this marketplace will emerge in January when we get a true snapshot of consumer spending in this sector.
But it seems facile to assert, firstly, that Google Inc (NASDAQ:GOOG) is eating into this sector due to the most fundamental of considerations – price. There is hardly any consumer in the world that isn’t tempted by a product which looks like a bargain. Personal experience tells me that many, many, many people, businesses and institutions (I shudder to think how many) have bought computer technology which they simply do not need. They will never use a quarter of the power or functionality that the machines are capable of; all they want to run is very basic programs, web browsing and emailing that do not require hi-spec, high priced computing technology.
Thus, it seems obvious that a bargain basement notebook, which unpretentiously does exactly what people require, has the potential to clean up. I can particularly see them doing well in poorly-funded public schools, for example.
Secondly, one of the factors that counted against Chromebooks previously was their need to be connected to the ‘net. But this is becoming, and arguably has already become, a completely trivial issue. We’re all connected to the ‘net almost constantly anyway, and increasingly fast broadband speeds make this almost an irrelevance. Thus, the undemanding web apps that Chromebook relies on are absolutely fine for most people’s needs, or certainly its core market.
Thirdly, Windows 8 has received at best a lukewarm response. Given the fact that Windows notebooks are more expensive, people are going to be less inclined to shell out for them in order to be lumbered with an operating system that has been critically panned in some quarters. Google Inc (NASDAQ:GOOG) is the king of marketing, and its decision to fully embrace the cloud in this sector is sure to pay off in the long-term.
So much emphasis with tech devices is on their devastating, state-of-the-art capabilities and specifications, when what many people want is something affordable that unfussily allows them to complete the tasks that they want to perform. Google Inc (NASDAQ:GOOG)’s Chromebook recognizes that giving people what they want rather than telling them what they want is the way forward, and I expect them to make further gains in 2014.