Does Samsung's New Chromebook Pose a Threat?
Samsung's very first Chromebook was an interesting beast. Unlike the power-guzzling, under-performing Atom based initial Google Chromebook, the Exynos Dual powered beauty offered solid performance and battery life in a power envelope that enabled a slim, fan-less design. The success of this particular Chromebook actually sent Intel , and the rest of the PC industry, into somewhat of a panic, leading them to flood the market with fast and cheap - although not quite fanless - "Haswell" powered Chromebooks.
This new Chromebook is attractive...
Samsung's pair of new Chromebooks are actually quite attractive. The 13" model, which will retail for $399, comes packed with a 1920x1080 display, a Samsung-designed Exynos 5 Octa processor, 4GB of DDR3, and 16GB of onboard storage. It should be quite zippy, have solid battery life, and in general be a nice machine for users that don't need the full power and flexibility of a more expensive Windows device.
It's actually an interesting exercise to compare this device with a comparably priced Windows 8.1 notebook. In this case, a scan of Newegg.com reveals that a close competitor is this $366 notebook from Acer:
For roughly the same price, the user gets a Pentium M3520, a quad core Atom-class CPU with integrated Intel HD graphics (it should be a fair bit faster than the Exynos Octa), and a larger - but lower resolution (1366x768 against 1920x1080) - display. In place of the 16GB of integrated flash memory, Acer offers a 5400 RPM 500GB hard disk drive (more space, but much slower storage). Of course, the Acer runs Windows 8.1 while the Chromebook is limited to Chrome. A final thing to point out is that the Chromebook is fanless while the Acer apparently needs a fan.
...but the traditional PC vendors are pushing hard, too
While Samsung's new Chromebook has a more premium feel to it (the whole faux leather thing gives that impression) and while Samsung probably has a pretty nice cost structure, it's important to note that the traditional PC vendors appear to be willing to fight tooth-and-nail to try to claw share away from Samsung by aggressively pursuing Chromebooks. Indeed, Acer put out a new Chromebook, packing an Intel Haswell processor that offered greater performance than the Samsung Chromebook but retails for only $199. Unsurprisingly, this device rose to the top of Amazon's best-sellers list in seemingly no time flat:
Does the new Chromebook change things?
The interesting thing here is the pricing of the new Chromebook. The best-selling notebooks seem to be, unsurprisingly, the cheapest ones (sans the MacBook Air). While the new Chromebook is obviously better/faster, there is probably some very real price elasticity in the low end notebook/Chromebook market. At $399+, many will probably go with a full Windows 8.1 device. The value in these Chromebooks seem to be as secondary/tertiary devices, which would explain the high sensitivity to price. Note that the Acer laptop, even with a fan, seems to sell better than the first-gen Samsung simply because it's a mere $44 cheaper.
Foolish bottom line
It looks as though Samsung has seriously de-focused on traditional notebooks and is trying to instead "build up" its Chromebook line (presumably because Samsung can keep more of the bill-of-materials to itself with a non-Wintel device). Whether this succeeds or not, time will only tell, but one thing is clear: The traditional PC ecosystem better put out a fanless, Intel-based Chromebook sooner rather than later. Say, when's Intel's Bay Trail going to find its way onto a Chrome device, anyway?
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The article Does Samsung's New Chromebook Pose a Threat? originally appeared on Fool.com.Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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