The HP Chromebook: RIP Microsoft

NEW YORK ( TheStreet) -- Among PC hardware manufacturers, Microsoft ( MSFT) is becoming about as popular as living in Eastern Europe under USSR occupation in November 1989. One by one, the dominoes are starting to fall.

First, it was Samsung. It's got the $249 Chromebook which looks like a copy of a MacBook Air.

Second, it was Acer. It's got the $199 Chromebook that looks like a copy of a regular Windows laptop.

Third, it was Lenovo. It's got a ThinkPad Chromebook that is sold to the education market.

And now, HP ( HPQ). Perhaps this is Meg Whitman's turnaround plan?

According to this document on HP's Web site, HP is set to launch its first Chromebook on Feb. 17. It's a 14-inch laptop, price yet to be set, but something close to $299 to $349 sounds reasonable.

Why would HP want to stick its knife in the back of Microsoft this way? Perhaps it has seen how Chromebooks saved Acer from posting even worse results than it did anyway. In a recent Bloomberg interview, Acer's CEO stated Chromebooks quickly (one quarter) became 5% to 10% of the total for Acer.

Five percent to 10%, even if it's a quick one-time jolt for a quarter, isn't going to change the trajectory of mankind. But it could help fill a hole in the income statement. And Lord knows, HP has some holes to fill, partially thanks to the poor performance of Windows 8 so far.

Whitman and HP do not need to hold any ideological love for Google ( GOOG) and Chrome OS. All they need to see is that it has saved Acer, and perhaps in 2013 it will save Lenovo as well. So why can't HP use Google's Chrome OS to save HP too?

Windows 8 -- and perhaps Windows 9 too, some day -- looks to become a long, hard slog. The leakage to Apple's ( AAPL) Mac and iOS and Google's Android was already tough enough. With Samsung, Acer and Lenovo now feasting on the dramatic and sudden sales increases of Chromebooks and Chromeboxes, HP would have looked like a stubborn stalwart continuing to pin its hopes on a declining market -- Windows PCs.

HP had already embraced the cloud internally with the switch to Salesforce.com ( CRM) in what may have been Salesforce's largest deal ever. It was one of Meg Whitman's first acts as CEO.

Having embraced the cloud for CRM and related services, why not embrace the cloud for the next-generation PC architecture as well? This was probably what Meg figured out, ditching Redmond in favor of its corporate neighbor in Silicon Valley, Google.

Ask yourself the question: How many people do you know in the last few years who got a new Hotmail address instead of a Gmail address?

None, of course.

Then, once people get a Gmail address, they start using Google Docs, which is a free competitor to Microsoft Office. It requires no complicated installs, configuration, and everything is saved automatically across all devices.

Microsoft Office can cost everything from $100 or so, to $400-plus. Google Docs is free.

With Microsoft Office also comes a service plan for that PC. Some people pay $250-plus for a 3-year "premium" service plan for a new Windows -- or for that matter Mac -- PC.

Meg Whitman probably saw that -- just like switching to Salesforce.com over some complicated Oracle system that required an army-like on-site staff and eternal expenses like a minor Mediterranean country -- the Chromebook also has its benefits in terms of dramatically lower lifetime cost. People tend to like it when a product costs less money up front, starts and works a lot faster, and then costs perhaps as much as 90% less to operate over the next 3 years.

After Samsung, Acer, Lenovo and now soon HP, who will be next? I don't know, but I can imagine that the major PC makers are now seeing the light. Asus, Sony ( SNE), Vizio -- they will all likely join the Chromebook bandwagon within months as well.

Is there any PC company that will not make Chromebooks or Chromeboxes? Possibly. There are always those one or two North Koreas or Cubas at the end of the rope, refusing to let go.

In the meantime, Acer says 5% to 10% of their volume is now Chromebooks. That's after launching the model in November. Surely that counts as one of the fastest product ramps in this industry.

What is needed now for Chromebooks and Chromeboxes is a little like what's needed for (wholly or partially) electrified cars: More models, and more distribution. The average consumer for the most part has never heard about the existence of a Google PC, let alone tried one. Most stores and other retail outlets don't carry them. This has improved over the last six months, but we are still in the embryonic stages, distribution-wise.

More Chrome OS models will need to include all display sizes, all battery sizes, and more premium models with excellent screens, pixel resolutions and first-class keyboards. This should not be that difficult or take too long. The new HP model is one small, but important step, in that journey.

Most people are still pooh-poohing Chromebooks. They are written off as jokes by geeks who are gaming fanatics, and by the same people who said BlackBerry could never be replaced in the enterprise market. No matter, this is the other side of the coin of Microsoft hurting.

Google is in ascendancy. And it's Chrome OS just as much as Android, leading the way.

At the time of publication, the author was long AAPL and GOOG and short MSFT.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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