Chromebooks or Windows: The Best Solution- Google Inc (GOOG), Microsoft Corporation (MSFT)

Windows (especially Windows 8) has received its fair share of complaints for being glitchy, slow and an overall disappointment. Despite these complaints/concerns, more than 60 million licenses were sold in just a three month period. Some people claim that Windows has met its match with Chromebooks, but has it?

Microsoft Corporation (NASDAQ:MSFT) should be proud of how dominant Windows OS has been over the past decade. While Microsoft Office still generates more revenue than any other sector of the company’s business, Windows OS did generate approximately $18.4 billion for Microsoft in 2012 alone. That $18.4 billion represents 24.9% of Microsoft’s annual revenue. Microsoft’s gross margins were over 76% in 2012, but that marked the lowest gross margin of the decade for the company.

There have been many arguments made for and against the Windows OS, but can Google Inc. (NASDAQ:GOOG)’s Chrome browser based notebooks compete? From the time of its launch in 2008, the Chrome browser is now used over 32% of the time – virtually equal to Microsoft’s Internet Explorer. In 2012, there were over 310 million active Chrome users worldwide. Samsung’s Chromebook has been the top selling notebook on Amazon.com, Inc. the past few months, although I suspect Amazon’s decision to seperate netbook and notebook sales has played a significant role in that ranking.

Although I am a fan of the browser, and even of the Chromebooks (for people who are mainly looking to surf the web), they have sold less than 500,000 units according to Digitimes.  “Chromebook has less than 1 percent [market] share in the notebook market,” they say. “Compatibility and consumer usage habits are the major obstacles that the OS would need to break through to attract demand.”

With 350 million total PC sales in 2012 (and an estimated 346 million in 2013), Chromebooks only represent about .14% of those sales. Yes, that’s slightly over one tenth of a percent. Let’s assume for a minute that one million Chromebooks will be sold in 2013 – that’s still less than .3% of total sales expected in 2013. PC sales are expected to be down in 2013 because of the underwhelming reception of Windows 8. The Chrome browser can be downloaded on virtually any device for free, which may not bode well for competition.