Can Google’s Chromebook Compete With Apple?

At the height of its glory in late 2007 Google (GOOG) was trading above $700 a share, worth more than $225 billion, and was about 30% bigger than Apple (AAPL).

Since then, Google's market value shrunk by roughly $40 billion, expenses and headcount mushroomed, and the company has done little to diversify its income stream and reliance on search.

Today Google is about half the size of Apple and its stagnant stock is testing the patience of an increasing number of investors and analysts who are hungry to see Google's next big product. "Google has been a one trick pony as far as earnings are concerned," says portfolio manager Michael Sansoterra of Silvant Capital Management. Like the rest of us, he is taking a wait-and-see attitude towards the new Chromebook laptops that begin shipping today, and waiting for a "show-me story."

In a marketplace dominated by $500 iPads, it remains to be seen if consumer uptake of the comparably priced but lesser-equipped Chromebook, a device Sansoterra describes as "a tablet with a lid and a keyboard," will do anything to compete with tech giants like Apple (AAPL). The iMac maker has a proven "ability to innovate and grow their business," Sansoterra says.

He adds there might still be room to buy shares because "Apple is a very, very large company that's selling at a very reasonable multiple. Everybody knows the story and likes it but it's very hard for them to surprise to the upside."

Sansoterra already owns both stocks, but when asked which he would put new money into today if he could only buy one of them, his answer is clear and unequivocal - Apple.

So the Chromebook will take its place in a very long line of Google projects that have yet to deliver much in the way of new revenue and earnings that investors crave from the Sultan of Search.

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How much of a threat exactly do Google Chromebooks pose to Microsoft?

After years in which it insisted that it had no intention of competing directly with Microsoft, Google is parking its tanks front and centre on Microsoft's lawns. The Chromebook - a "thin client" laptop that will have virtually no local storage - launches today, Wednesday, and is the first serious challenge to the Windows/Office hegemony in two decades.

The Chromebook doesn't run Windows; it runs Google's second operating system (after Android), ChromeOS, which is stripped down so far that it just runs a browser and associated programs. No Windows. No Microsoft Office. No Microsoft anything, in fact. ChromeOS is a Linux-based system that Google has been working on since 2009. And now it's becoming real, through "Chromebooks" from Samsung and Acer (and also, unofficially, from the Australian company Kogan, which is sellingthem in Australia and the UK).

Yet to begin with, the threat to Microsoft, and the promise to Google, from Chrome is minimal. First, the Chromebook is not aimed at the average consumer. It's aimed at the enterprise customers who are Microsoft's bread and butter. Google, with the Chromebook, is aiming to eat Microsoft's lunch - and its dinner and breakfast too. How? By nibbling away at Windows and Office revenues by finding the companies that have finally had enough of Office upgrades, and aren't that keen on the Windows upgrade cycle - and associated costs - either. The other target: schools - where Microsoft first gets its customers.

Chrome is, make no mistake, a dagger poised over Microsoft's heart. The only question is whether it's made of steel or rubber.

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Google's tepid Chromebook reviews meaningless: It's all about business

Let’s face it. Google Chromebook buyers—whether via Acer or Samsung’s netbook—are going to be a self-selecting bunch. 

Consider:

• CNET’s reviewsays the Samsung hardware, battery life and start-up times are great. However, CNET won’t recommend the Chromebook “until and unless Google improves the Chrome OS.” The biggest beef is opening ZIP files, photo editing in the cloud and the need for a constant Internet connection. But here’s the problem: The Chromebook isn’t for folks that want offline capability sometimes. In other words, the Chromebook is for the consumer that’s all cloud all the time.
• Engadget acknowledges that the Chrome OS has real limitations at this time. The upshot: Engadget is betting that Google will fix the OS over time.
• And then there’s Steven J. Vaughan-Nichols. He’s an open source guy that’ll live in the cloud and not blink. Vaughan-Nichols liked the battery, life, hardware, keyboard and knocks naysayers complaining about being offline. After all, you can save music, documents and video to the local solid state drive. It’s not ideal, but the Chromebook isn’t a doorstop without a net connection. Bottom line for Vaughn-Nichols is that the Chromebook is a nice complement to his laptop.

Everyone agrees that the Chromebook needs to be cheaper.

In the end, consumers will vote with their dollars and I have a tough time seeing folks drop $500 on a browser-based netbook when there are shiny tablets everywhere. Of course, Google fans will be all over the Chromebook, but that’s a crowd of an undetermined size.

The real kicker here is that it really doesn’t matter what consumers think. The Chromebook could flop at retail and the only companies that will care are Samsung and Acer (and maybe Best Buy). Meanwhile, it’s possible that Samsung and Acer don’t care about consumer sales. Why? The Chromebook is an enterprise play and Samsung and Acer will happily take the business sales.

As noted before, the Chromebook will be attached to Google Apps deals.IT execs will give Chromebooks a whirl via pilots and mix and match devices. The corporate Google Apps customer is a natural audience to the Chromebook. In the end, Google doesn’t have to sell the Chromebook to the masses just to the CIO looking to minimize her desktop management costs.

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Google Chromebooks available for pre-order

Google Chromebooks can now to be pre-ordered at Amazon.com and BestBuy.

Google made the announcement Thursday on Twitter, saying that Chromebooks from both Acer and Samsung are available.
"Nothing but the web: Samsung & Acer #Chromebooks now available for pre-order from @Amazon and @BestBuy in the US http://t.co/LpY0jWU," tweeted GoogleChrome.

Amazon notes that it's taking orders for the Samsung Series 5 3G ($499.99) and the Samsung Series 5 Wi-Fi ($429.99) -- both come in either black or white. The online seller also is taking orders for Acer's Cromia 3G ($449.99) and the Cromia Wi-Fi ($379.99).

BestBuy is taking orders for the two Samsung models at the same pricing.

For some of the Chromebooks, the sites say they simply have not been released yet; for others, like the Samsung Series 5 3G Chromebook, it's noted that they are slated to ship on June 15.

When Google first unveiled the Chromebooks, company executives said they'd first be available on June 15.
Last month, Google took the wraps off the upcoming Chromebooks, which run Google's Chrome operating system, at the company's annual Google I/O developers conference in San Francisco.

Google's Chromebooks, according to industry watchers, could be a boon for the company that has been trying to work its way into the lucrative enterprise market . If the Chromebooks are adopted in the corporate world , then Google's OS and its office-related cloud apps would get a lot more play in the enterprise as well.

To better woo businesses, Google is selling the Chromebooks on a subscription basis to companies with a starting price of $28 per user.

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Google takes on the Windows laptop

Google has announced that it will be releasing a portable PC called Chromebook in June that will run on its own operating system - not Windows. The Chromebook will be made by Samsung and Acer, who have both previously made machines that run Microsoft software. 

Google's new laptop will be completely web-centric, relying on the company's cloud services. That means the Chromebook will have almost no storage capacity of its own. It's been described as a tablet computer with a keyboard and, according to Google, it will bring together the best features of tablets and smartphones. 

These features include great portability, a very quick startup time, cloud-based apps, built-in 3G, and battery-life rivalling that of the iPad and Motorola Xoom. 

The Chromebook laptop will, as its name suggests, run on Google's super-light Chrome OS. Google Chrome is basically a web browser that takes you to applications you'd normally store on your harddrive, like Outlook or Excel, online. This is the essence of cloud computing, and explains why Google's new machine will come with very little storage space. 


Chrome OS, like Google Android, will be free. Google wants to encourage users to spend more time on the web, where they are likely to use Google, which in turn will expose them to ads - the core of Google's business. 

Google's take on the laptop will start shipping on 15 June 

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