Microsoft Corporation (MSFT), Hewlett-Packard Company (HPQ), Intel Corporation (INTC): The PC Market Will Survive, but the Old Gods Could Die

Chromebooks fill a comfortable niche between ultraportable (tablet plus Bluetooth keyboard) computers and full-sized laptops. They allow users access to a full-sized keyboard and Google’s ecosystem of productivity apps (Docs, Gmail, Chrome) for their daily needs. Chromebooks depend heavily on cloud-based connections, and are automatically updated over-the-air by Google. In other words, Chromebooks are the antithesis of the traditional Wintel machine – cheap, lightweight and loaded with free software. Their cheap price makes them attractive, full-featured mobile computers for students and workers alike.

Although Chromebooks only accounted for 4% to 5% of the U.S. PC market in the first quarter, they have already earned the allegiance of Microsoft Corporation (NASDAQ:MSFT)’s traditional hardware allies. Even Intel Corporation (NASDAQ:INTC) has over 1,000 engineers working with Google to ensure that their newer processors support Chrome OS. Therefore, a new “Chrometel” empire could soon succeed the fading Wintel empire.

The Foolish bottom line

In conclusion, the PC industry will not fade away. Rather, it will evolve, and some companies, such as Microsoft Corporation (NASDAQ:MSFT) and Hewlett-Packard Company (NYSE:HPQ), might get left behind. If the PC industry wants to evolve, it must stop following these “old gods” and follow a new one, Google. Google’s ecosystem of apps could now unify both the mobile universe, with Android, and the PC one, with Chrome OS.

When viewed from this perspective, it seems utterly foolish for hardware manufacturers to follow Microsoft Corporation (NASDAQ:MSFT) and its clumsy hybrid operating systems, waning popularity, and high licensing fees. Therefore, tech investors should align their portfolios accordingly to prepare for this inevitable paradigm shift.

Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Google and Intel. The Motley Fool owns shares of Google, Intel, and Microsoft.

The article The PC Market Will Survive, but the Old Gods Could Die originally appeared on Fool.com.

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