GigaChrome
At the end of 2019 the Japanese government approved a ~$2.2b program initiated by the Ministry of Education, Culture, Sports, Science & Technology known as the Global Innovation Gateway for All (GIGA). In that budget was capital allocations for high-speed connections to each school in Japan, and for a PC/Tablet for every elementary and secondary school child by 2023. The program not only covered public schools and universities, but private schools, who share 50% of the cost, with local governments implementing the network projects, with a 10% penalty if they did not start the program in 2020. On the hardware side, the program has allocated $450 per student, regardless of the school type or level, for a PC or tablet. With ~13m students in Japan’s primary and secondary school system, that comes to a lot of PCs and laptops.
While offerings in Japan will certainly differ, in the US, Best Buy offers 40 laptop models selling for under $450, of which 18 (45%) are Chromebooks. Not all Chromebooks are less expensive than laptops, but given that they are designed to be working primarily in the cloud, they tend to have less storage and less powerful processors than their Windows OS brethren. Since programs like GIGA described above, are all oriented toward on-line computing, Chromebooks are a solution that allows such programs to meet the budget limits of such vast numbers of students.
The impact of these programs is significant, and we believe one of the reasons why the strength in notebook/laptop demand has reached unusual proportions, even during the COVID-19 pandemic. Japan itself is the perfect example, with Chromebook sales soaring last year, which we show below, and while the 1.8m units sold in Japan last year represented about 6% of all Chrome book shipments last year, the incremental increase from 2019 was astounding. Of course, not all of that increase came from the GIGA program, given the COVID-19 outbreak, but Japan is not the only country to implement such programs, although theirs’s is a very comprehensive one. Given that the program in Japan (and others) are continuing through this year and next, we expect at least some incremental demand in lower-priced laptops and Chrome books.
While offerings in Japan will certainly differ, in the US, Best Buy offers 40 laptop models selling for under $450, of which 18 (45%) are Chromebooks. Not all Chromebooks are less expensive than laptops, but given that they are designed to be working primarily in the cloud, they tend to have less storage and less powerful processors than their Windows OS brethren. Since programs like GIGA described above, are all oriented toward on-line computing, Chromebooks are a solution that allows such programs to meet the budget limits of such vast numbers of students.
The impact of these programs is significant, and we believe one of the reasons why the strength in notebook/laptop demand has reached unusual proportions, even during the COVID-19 pandemic. Japan itself is the perfect example, with Chromebook sales soaring last year, which we show below, and while the 1.8m units sold in Japan last year represented about 6% of all Chrome book shipments last year, the incremental increase from 2019 was astounding. Of course, not all of that increase came from the GIGA program, given the COVID-19 outbreak, but Japan is not the only country to implement such programs, although theirs’s is a very comprehensive one. Given that the program in Japan (and others) are continuing through this year and next, we expect at least some incremental demand in lower-priced laptops and Chrome books.
Chrome Book Shipments - Japan - Source: Digitimes Research
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