With friends like these, it’s no wonder Microsoft started making its own PCs. This week, HP, the world’s largest maker of computers, launched a portable computer running Google’s lackluster Chrome OS. And it’s not alone: Lenovo, the second-largest maker of the PCs in the world, also announced a Chromebook recently, joining Acer and Samsung. Why are Microsoft’s biggest partners actively working against the company?
Although it’s understandable that PC makers don’t want all their eggs in one basket, the Microsoft partnership has resulted in the dominant PC platform, one that still garners over 90 percent market share after a full 20 years at the top. But PC makers have routinely tried to undercut Microsoft and Windows, from the days of IBM’s OS/2 and Lotus SmartSuite to the Linux-based netbooks of several years ago.
Today, however, PC makers are increasingly turning to Chromebooks as the Windows alternative of choice. Like the Linux-based netbooks they spiritually replace, Chromebooks are toy computers running limited software on performance-challenged hardware. Chrome OS, the Google-based OS that powers these systems, is basically just the Chrome web browser with a few peripheral functions thrown in, and it’s fair to claim that a low-priced Windows-based notebook loaded up with the Chrome browser would be about 100 times more useful.
But that assessment assumes we’re worried about customers. Chrome OS shines only for the PC makers, and here we see these companies pushing a solution that benefits them and not their users. Chrome OS, it turns out, is free. And that means that like Linux before it, Chrome OS can help these companies more easily turn a per-unit profit in a market in which they have seemingly forgotten how to do so.
I’ve written before why it was the PC makers' own similar actions a decade ago that triggered the netbook-based race to the bottom, and that these firms can no longer make money on Windows-based PCs because consumers now expect unrealistically low prices. Microsoft insiders have confided to me that PCs with no crapware bundle would need to be priced at an average of $800 in order for that business to be successful. But the average selling price of portable computers in the United States is about $420.
What’s still unclear is why PC makers would even try to back such a lackluster entry. Linux, at least, was a full OS, comparable in many ways to Windows. But Chrome OS is a web browser that still has very limited offline capabilities. And HP’s machine, like most Chromebooks, isn’t particular enticing even if you can look beyond the lack of software capabilities. It’s large, heavy, and plastic-looking, virtually identical to the firm’s Windows laptops. But it gets barely more than 4 hours of battery life.
In Windows 8, Microsoft has given the PC makers the system they need to raise prices with tablets with and hybrid devices, and to excite consumers with modern multi-touch capabilities and stellar battery life. But what these companies shipped in the holiday selling period was—wait for it—a selection of low-cost, traditional PCs that didn’t have any multi-touch capabilities. Microsoft is correct to blame these firms for ’s slow start. But with PC makers now hedging their bets with Chromebooks, maybe it’s time to start reevaluating the relationship.
And before anyone blames Surface for this silliness, remember that Microsoft’s PC push was in fact triggered by years of abuse by its PC maker partners, which have been busy ruining the Windows experience with crapware, low-end hardware, wrong and out-of-date drivers, and no control over the retail sales points, which often look like they were picked over by a mob from a Mad Max movie. If anything, Microsoft waited too long.