Google and Co. Hope Price Drops Give Chromebooks New Shine

Samsung Chromebook

Google and its hardware partners are revamping their approach to Chromebooks with a series of changes. Perhaps most interesting among these, from the consumer perspective at least, is a price cut to the current Samsung and Acer models of roughly $50 or so.

Specifically, the WiFi Acer Chromebook dropped to US$299 from $349 and the Samsung WiFi from $429 to $349.

Reasons to Consider

There are a number of possible reasons behind the new price points. First, the holiday shopping season is about to start. Many electronic product providers are positioning their products’ prices as attractively as possible, given that projections for spending this season are not very high.

Secondly, the cuts may be a response to the high demand for the Amazon Kindle Fire tablet — a $199 device. Also, the Nook’s latest device is moderately priced as well at $249. In other words, price competition in the lower end of the mobile PC market is tightening, and the Chromebook wants to stay competitive.

The third possible reason: The Chromebook just hasn’t sold that well, and lowering the price is one way to goose year-end sales.

Or perhaps it’s all part of a larger plan to make the Chromebook as user-friendly as possible. That is the gist of Google spokesperson Lily Lin’s response to the E-Commerce Times.

“Google has been working closely with our partners on ways to improve the overall Chromebook experience,” she said, referring to the price reduction, “all the while making them even more affordable for folks.”

“Timing-wise, we’re certainly excited we were able to announce today, just in time for the holiday season, that Chromebooks are now available starting at $299,” she said.

“As far as sales goes, Google doesn’t sell Chromebooks, so we don’t have sales numbers to report,” she explained. “Our partners just started shipping Chromebooks a few months ago and so far, we’re encouraged by the positive feedback we’ve received from consumers and the rate of adoption by schools and businesses.”

A Combination of Many Drivers

All of the above-mentioned factors may have come into play to one degree or another, but Charles King, principal of Pund-IT, told the E-Commerce Times that a meager sales rate is likely one of the bigger reasons.

“The demand for Chromebook has not been what Google had hoped it would be, which is not terribly surprising since the most dynamic platform in personal computing appears to be the iPad right now,” he said.

Also, he continued, the Chromebook has occupied an “oddball” corner of the market that used to be mostly the territory of netbooks — namely, low-performance, Internet-specific clamshell-style devices.

In addition, “Chromebooks require a great deal of consumer education or user education, which is seldom a happy experience for vendors.”

Burning Chrome

Whatever the reason — oddball market niche or consumer education strategies that went flop — it is clear that Chromebooks are not selling well, based on unofficial estimates offered by IDC analyst Bob O’Donnell.

“They are not selling in huge numbers,” he told the E-Commerce Times, estimating that IDC’s expectation is that between 120,000 to 150,000 units will move globally by the end of the year. That’s a tiny fraction of the PC market, he said.

In more lucrative times, the Chromebook might have done better. “But today people are on limited budgets and they are not willing to plunk down money for every electronic gadget that comes their way,” he said.

WiFi-Only and Other Tweaks

The price cuts are not Google’s only response to these market shifts. It is also rolling out a software update that tweaks the New Tab page and adds links to music apps and games in the Chrome Web store.

In addition, Samsung is marketing a WiFi-only version of the Chromebook Series 5 in the hopes of attracting users that don’t want to pay for 3G support.