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Is Chromebook the New Netbook?

Many of the facets of Chromebook are similar to netbooks such as low price, slower CPU, and small storage capacity, but certain differentiating aspects make Chromebooks potentially more legitimate notebook substitutes compared to the netbooks of seven years ago. With typically larger screen sizes, standard keyboard, and Google Drive online storage, Chromebook users can create content as if it were a full-fledged, more expensive notebook, assuming one can accept Google’s apps as a full substitute for mainstream Windows apps. So, why hasn’t the Chromebook market taken off? Is it the lack of processor speed or storage? Is it the limiting features of the Chrome OS? On the surface, those are probably the main reasons, but the other, perhaps larger reason, is that the price of regular, fully-featured low-end Windows notebook prices are not that different than Chromebooks.

While price points are attractive, there is little evidence that consumers or commercial accounts are widely embracing the Chromebook platform, which is based on feedback from OEM system vendors and other relevant players in the industry. Currently, Chromebook production is running at approximately 1 million per month, and we expect shipments to reach approximately 8-10 million this year. Although this market continues to grow year after year, total volumes have been modest to date, and this market will most likely plateau at a level that supports a potentially limited TAM. Additionally, OEMs may limit the volume of low end offerings, such as the Chromebook and even Windows 8.1 with Bing models, in order to maintain a portfolio of products that supports a healthy gross margin over the long run.

TRENDFOCUS will expand its Chromebook analysis in the coming quarters in the Storage Interlinks and NAND/SSD reports.

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