Microsoft Now Officially Weeding Out Chromebooks with Price Assault

I’ve been writing quite a lot on this blog about Chromebooks. This is because it is a case study into what qualifies for a disruptive innovation and what does not. This story also tells us that corporate history is one yardstick we can use to determine whether or not the incumbent will address the threat of disruption head-on, or whether they will flee up-market.

My position which dates back to January 2013, is that Chromebooks will follow the fate of Netbooks. In fact, since the sales of Chromebooks are significantly lower than peak Netbooks, it will likely end as a dud that only the tech industry showed any interest about.

The thinking was very simple, and all I did was say that;

This time, if Microsoft decides to fight back, they would start providing Windows 8 cheaply to low-spec models like the Acer. They would also add free SkyDrive capacity. It is also likely that they would include free Office 365 to compete with Google Docs.

Microsoft has now officially started to do this.

Microsoft COO, Kevin Turner is cited as saying;

“We are going to participate at the low-end. We’ve got a great value proposition against Chromebooks, we are not ceding the market to anyone.”

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Microsoft is not invincible and there is no guarantee that fighting Chromebooks head-on will be net positive for Microsoft. It is possible that the low-end Windows devices will cannibalize Windows revenue without generating new revenue from Office 365, etc. What we do know however is that Microsoft’s corporate culture has repeatedly addressed low-end disruption head-on. It will undercut low-end disruptors if they ever gain a foothold.

This is simply a case of Microsoft doing what it has always done once again.