PC sales boomed throughout 2021, sending semiconductor earnings soaring. One company with little to cheer about, at least so far as its conventional Windows clients are concerned, is Microsoft. For many years, we’ve talked about the “PC industry” and also the “Windows PC” industry as though they were synonymous. New data on 2021 PC shipments suggests we shouldn’t be.

As Emil Protalinski writes for GeekWire, “This can be a big win for Google along with a warning for both Apple and Microsoft. It also signals to app and game developers that Chrome OS can't be prevented.” Data points quoted within the paragraph here are by IDC.

In Q1 2021, Apple held 5.8 percent market share, Google held 5.3 %, and Windows had 87.5 percent share of the market. In Q4 2021, Microsoft’s share of the market slipped to simply 76.7 percent. Apple had 7.7 percent share in Q4, and Chromebooks claimed no less than 14.4 percent of the market. Full-year figures show Microsoft declining to 80.Five percent of the market, down from 85.4 %, with Chrome OS claiming 10.8 percent and Apple as much as 7.5 percent.

The full-year numbers aren’t as dramatic because the quarterly figures, but they still show Chrome OS claiming 4.4 percentage points of share of the market (it held 6.4 % from the market in 2021). Other analysts agree; Omdia’s own data shows Chromebook sales rising by 1.67x in 2021 as well.

Global notebook PC / Chromebook shipments and YoY change (2021 – 2024)

Analysts don’t think the Chromebook trend will slow down. This is part of why ARM might be proving itself to be an authentic threat to Intel and AMD with what has traditionally been thought of as the center from the x86 market. The M1 has demonstrated that custom ARM silicon can beat x86 at its own game, but the x86 legacy software market is still the proverbial 800-pound gorilla within the room. Attempting to best x86 on Windows means building a high-performance ARM chip along with a top-notch emulator. It’s an additional barrier that helps keep the PC market and also the mobile phone markets technologically separate. This specific barrier, however, is only as strong as Windows’ share of the market.

Chromebooks don’t carry exactly the same expectations around legacy software support that the Windows laptop does. That enables ARM and x86 to fight on more even terms. In reality, all of this presumes that the company such as Qualcomm, Samsung, or Nvidia will build a leg CPU core that can compete with x86. Such CPU is still a few years away, best-case. x86 CPUs are presently the preferred Chromebook solution for anybody who uses a higher-performing system, and that’s not likely to change in just the following couple of years. But if ARM CPUs show a sustained capability to beat past x86 chips, we’re going to see more chip designers interested in entering that market. Once they do, they won’t necessarily focus on Windows, where the entrenched software market makes beating x86 as hard as it may often be. They’ll focus on Chromebooks, where x86 enjoys a performance advantage but lacks a four-decade software library to anchor it.

Windows, obviously, will stay its own titanic force — nobody expects the OS to simply collapse — but it’s clear that Intel and AMD could be fighting on the shrinking pie when the two companies can’t maintain Chromebook market share. Today, obviously, all of this is theoretical, but that’s the way the semiconductor market works. It’s the CPUs on drawing boards today that’ll be defining the performance market 3-4 years from now. Today, AMD and Intel don't have any problem. Four years from now, it could be a very different story. Microsoft’s own decision to transition from defining itself in terms of Windows and towards a cloud-centric future makes a lot of sense in the face of numbers like these. Microsoft really wants to have other business segments to speak about by the time Chromebooks are really carving into its share of the market.

It’s clear since the long period of tranquility in the PC market with the 2010s, where nothing much interesting happened, was less a terminal decline and more of a pause. There’s a (relatively) new OS eating market share along with a new CPU architecture. AMD has become a competitor for Intel over the entire x86 space simultaneously that AI and ML accelerators are redefining the CPU’s role within the larger system architecture.