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Walmart, Staples to Sell Google Chromebook

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Internet search giant Google Inc. (GOOG) recently announced that its Chromebook will be available at Wal-Mart (WMT) and Staples (SPLS) stores.

Acer’s Chromebook will be available in 2,800 Wal-Mart stores across the U.S for $199.0. Further, Staples will offer Chromebooks from Acer, Hewlett-Packard (HPQ) and Samsung in its 1,500 stores across the U.S.

These stores will join other retailers such as Amazon.com and Best Buy to offer Google’s Chromebook. Also regional stores such as California-based Fry's and Florida-based TigerDirect will start selling Chromebook soon. Google is also planning to expand into overseas markets such as the U.K., France, the Netherlands, Sweden and Australia.

Google introduced its Chromebook in 2011. Initially, it was only available online. Chromebooks run on Google's Chrome operating system (:OS) and come with preinstalled cloud-based Google services and products, including Google Docs, Calendar, Search, Gmail, YouTube and Hangouts.

Google’s strategy of making its Chromebook available through leading retailers makes sense as it is facing intense competition from Microsoft’s Windows 8 notebooks and smart devices. We believe that Google may ride out this difficulty based on these initiatives.

IDC estimates that tablet shipments may surpass desktops in 2013 and notebooks in 2014. Total tablet shipments may touch 352.3 million units in 2017, increasing at a compounded annual growth rate (CAGR) of 174.5%.

Currently, all PC makers are battling the slump in the PC market caused by the sluggish economy. In addition, the popularity of tablets running iOS and Android are cannibalizing PC market sales, further deteriorating the scenario.

In the first quarter of fiscal 2013, Google’s gross revenue (including TAC) touched a record $14.4 billion, representing sequential and year-over-year increases of 2.3% and 36.2%, respectively. Excluding the $1.5 billion contribution from Motorola, revenues were up 21.9% from the year-ago quarter.

Google has a Zacks Rank #3 (Hold).

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