Microsoft, reacting to pressure from low-cost Chromebooks, now has its own low cost but fully functional laptop PCs debuting at under $200 for the upcoming holiday shopping season.

Computers running Google’s ChromeOS hit the market in 2011, manufactured by major brands like Samsung, Acer, and HP. ChromeOS consists of a scaled down version of the Linux operating system that boots up to what is essentially a Google Chrome web browser that integrates tightly with Google’s cloud services. There are two types of ChromeOS devices on the market, Chromebooks (laptops) and Chromeboxes (desktops).

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The overall simplicity of ChromeOS, combined with the dramatic mobile technology advancements over the last five years helped get many Chromebooks to a price point of approximately $250. Google, with a revenue model built around its search and other services, doesn’t charge the manufacturers a license fee for using the ChromeOS operating system. The resulting low price point, combined with easy maintenance made them very attractive in the education market. Google captured 19% of the education market last year according to the Wall Street Journal, and Google claims that they are close to 50% in 2014.

Microsoft, clearly concerned about this sudden surge in Google Chromebook sales, is getting more aggressive at the low end of the market – especially now that many Chromebooks run on the same hardware architecture as Windows. Microsoft has decided to now give away its Windows 8.1 operating system to manufacturers making low-cost Windows PCs. The result is a new line of computers that can run the library of Windows software yet cost the same as their Chromebook competitors. Microsoft is hoping that the making the default search engine on these devices Bing will help drive revenue to their search engine that competes with Google.

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These new PCs are of a higher quality than the tiny netbooks that came out a few years ago. The keyboards are full sized, the Intel processors are adequate for most tasks, and the battery life on some models can approach 8 to 10 hours. So far HP, Asus, and Acer have the $199 computers available, with other manufacturers following soon. HP even has a $99 Windows tablet on the way later this month.

The real winner in this fight are consumers – especially those who want to purchase a computer for a child. A fully functional Windows PC can now be purchased for more than half the price of an iPad.