Netbooks Primed To Push Linux Into Mainstream

Filling an important mobile computing niche between smartphones and notebooks, netbooks are quickly gaining favor for their portability as well as their price tag, which is usually under $500. Early netbooks were Linux-based and featured barebones hardware configurations, but Microsoft Corp., Redmond, Wash., now allows PC makers to sell more powerful Windows XP-based versions that come equipped with up to 1 GB of RAM and 160-GB hard drives.

With Gartner Inc. predicting that worldwide netbook sales will reach 5.2 million this year, 8 million in 2009, and a whopping 50 million in 2012, desktop Linux purveyors are moving to carve out a larger share of the market. Canonical Ltd., the organization that oversees the Ubuntu Linux distribution, in November inked a deal with mobile device chip maker Arm Ltd., Cambridge, UK, which designed the chip for Google Inc.'s Android phone, to develop a version of Linux designed especially for netbooks.

The growing prominence of cloud computing is tailor-made for desktop Linux on netbooks, says Ron Bongo, CEO of Corra Technology Inc., a of Montclair, N.J.-based Linux solution provider. "For Web-based applications, you don't need Windows because you're accessing these apps from a browser," he said. "If the main point of netbooks is cheap access to the Web, using desktop Linux instead of Windows makes sense."

Bob Nitrio, president of Ranvest Associates, a system builder based in Orangeville, Calif., believes that Linux on netbooks is a trend that will continue to present a challenge to the dominance of Windows. "This concern should increase as Linux desktop distributions improve and mimic the familiar ease of use that people have come to expect from Windows," Nitrio said.

Microsoft was late to realize the impact of Linux on netbooks. In Microsoft's first quarter earnings call in October, executives chalked up a four-point shortfall in Windows client revenue to netbooks, many of which ship with XP Home. Earlier this year, Microsoft extended the OEM deadline for selling XP Home on netbooks to June 30, 2010.

In response to the netbook threat, Microsoft has drastically slashed the price of XP, according to solution providers.

"Microsoft was terrified, because for the first time, Linux on the desktop was actually starting to get some traction in their sweet spot," said one solution provider, who requested anonymity.

However, desktop Linux still faces challenges, including the fact that some users still can't figure out how to use it, said one solution provider that sells netbooks. "The return rate on Linux netbooks is 4-5 times what we're seeing for Windows netbooks. The bottom line is that some consumers still don't understand Linux, and they can't do what they want to do with it," said the source, who asked not to be named.

Gordon Haff, a principal IT adviser at research firm Illuminata Inc., Nashua, N.H., said that while netbooks are gaining popularity, most of them are being sold with Windows, and that trend isn't likely to change anytime soon. "Application developers generally don't want to support more operating systems, and there hasn't been much interest from ISVs when it comes to moving proprietary applications to Linux," said Haff.

The problem isn't that Linux implementations on netbooks are inferior, but that the vast majority of users still want the completeness and stability of Windows, according to Joe Toste, vice president of marketing at Equus Computer Systems Inc., a Minneapolis-based system builder.

"After customers' initial fascination with Linux systems," Toste said, "our sales of Microsoft XP Home on netbooks haven't been much different than our Windows sales on other systems--hovering around 98 percent."