Thursday, July 11, 2013

What Does Google See in Chromebooks?

Google’s Chromebook initiative initially was derided by many as “too little, too late,” coming at a time when the market was turning to tablets as the growth category in computing devices.

Google obviously did not agree then, and sales results now suggest Google was on to something. Though Chromebooks still represent a small portion of the total U.S. market for laptops and netbooks, Chromebook market share, and apparently growth rate, is increasing.

The devices had about four percent to five percent market share in the first quarter, though that was up from one percent to two percent in 2012, according to Mikako Kitagawa, Gartner analyst.

On the other hand, there is little question that tablets are leading consumer interest in computing devices at the moment. Global PC shipments dropped to 76 million units in the second quarter of 2013, a 10.9 percent decrease from the second quarter of 2012, according to preliminary results by Gartner.

This marks the fifth consecutive quarter of declining shipments, which is the longest duration of decline in the PC market’s history, Gartner says.

“We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets,” said Mikako Kitagawa, Gartner principal analyst.

“In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC,” Kitagawa says.

What does Google see in the PC market that others might not? As with Android, Google’s revenue model benefits from increasing the ways Google can steer users to its own apps, devices and operating systems.

Though it might be hard to quantify directly, the more touchpoints Google has, the more places and times it can display ads that underpin its current revenue model. That is the same reason Google has been so proactive in pushing for faster broadband access, lower cost broadband access and ubiquitous access.

In addition to the “always connected” angle, future web apps might act much like launch “native apps” on devices, even when those devices momentarily are not connected.

Chromebook might seem like a distraction. But it is a piece with Google’s support of Android, maps, office suites, YouTube and other apps, devices and operating systems. All of that contributes to creating an ecosystem where the ability to sell ads based on detailed knowledge of people, their behaviors and activities is possible.

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