The biggest player in the PC market is undeniably Microsoft. The developer of Office and Windows has a stranglehold that is hard to overcome and the 90% market share ably demonstrates that. However, there has been a steady decline in the size of the Microsoft market share, albeit by minute amounts.
Declining PC Sales
Worldwide PC sales concurrently have been in constant decline. After attaining its peak in 2011 with 355.4 million units shipped, that number now stands at 288.7 million. It is more than just coincidence that PC sales peaked a year after the launch of the Apple’s iPad, ushering the world into the tablet era.
Microsoft’s business model of creating software and letting hardware manufacturers like Dell and HP do the heavy lifting has been immensely lucrative through the 90s and the 2000s. Apple, however, has since changed the landscape by demonstrating how much control a company can exercise by being in charge of both departments.
With the launch of Surface, Microsoft tried its luck at controlling an entire eco-system at the expense of alienating its Original Equipment Manufacturing (OEM) partners, by marginalising them. Apple meanwhile has benefitted due to the percolating effect the iPhone and iPad success has had on the Mac line of products, growing their market share to 7.4% in April 2016 (up from 6.7% a year ago).
All these numbers aside, which are intended neither to celebrate Apple nor to denigrate Microsoft, the decline in PC sales should act as an omen that might end up playing in Google’s favour by helping the oft-ignored Chromebook.
In the consumer space, a laptop has been predominantly used for surfing the web and streaming media with the rare usage of productivity tools like Office interspersed in between.
Tablets with their superior user experience and intuitiveness are better suited for a bulk of the tasks that PCs have been used for thus acting as the nail in the PC coffin that has led to the steady sales decline.
The Surface and the MacBook are just too expensive for use as a browsing or streaming device. Unless you are a techie or a professional, a tablet ends up rendering a PC redundant.
Enter The Chromebook
Google’s Chromebook has been maligned (here and here) for its Spartan demeanour following its release. The Mountain View, a California-based company, however, has made steady improvements since the 2011 introduction, which range from copious amounts of storage to an improved selection of apps specifically meant for Chrome OS.
In that sense, the Chromebook is more than just the Chrome browser sandwiched between a keyboard and a screen, as it once was. It got a huge boost regarding its functionality when Google made all the Play store apps available on Chrome OS.
This decision might be the wisest one Google made from the Chromebook’s perspective as it has the potential of singlehandedly bringing in millions of new users, especially those from the developing world who are yet to use a laptop but are familiar with Android apps thanks to their smartphones.
The very attractive sub-$150 starting price (the cheapest in the industry) does not hurt at all. As well, over the five years since its launch, we have grown more comfortable with the idea of having our personal data stored in the cloud. This apprehension towards the cloud along with the limited tasks that could be accomplished online and the lack of onboard storage might have been deterrents then, but could very well be strengths in the not so distant future, assuming they already are not.
The ability to work on the Microsoft Office suite by downloading Office Online from the Chrome Web Store is the best example to drive home the point that many more tasks today can be performed exclusively online, thus falling right in Chromebook’s alley.
All these factors have led to schools in the US embracing the Chromebook as their go-to device, catapulting it to the number two spot behind Windows PCs, outselling Macs during 1Q16 in the process while biting into Microsoft’s market share.
It is true that Google’s parent company Alphabet barely makes any money on Chromebooks since Google gives Chrome OS away for free. This comes straight out of Google’s playbook of offering vital services, getting users signed up and selling advertisements.
If users can look past the privacy concerns which come with the territory, the no-frills nature of the affordably priced Chromebooks coupled with the diverse selection of Apps could very well lead to increased revenue for Google in spite of the dwindling PC market.