It's been forever the Linux community's hope that Linux would make a big splash on the desktop, but that hope has not yet materialized. However the netbook category has created a new set of circumstances which has set up Linux to finally have a sizable presence on the netbook desktop:
- Netbooks need to be inexpensive (currently $300 to $500); in fact that's their biggest draw
- A proliferation of models from various OEMs/ODMs will drive fierce competition and razor-thin profit margins
- In some cases, netbooks will be given away in return for service provider contracts (the mobile phone model)
- Netbooks are largely Internet centric (web browser, IM, VoIP, web apps, ...) and thus don't have as much, the Windows application compatibility constraints
- Netbooks tend to have smaller screens, making new UIs more compelling. This opens a path to disruption by Linux
- Netbooks tend to have less resources than full notebooks, making bloatier software less compelling
- Intel has created a Moblin ecosystem around Linux and the Atom processor line, and made it far easier to license proprietary codecs for Moblin compliant software stacks
- Adobe has finally synchronized releases of Flash for Linux and Windows
- Hardware vendors are pressured to open up or at least well-support their driver software for Linux, or miss out on the netbook market.
In light of this, Microsoft will likely have to reduce cost of XP (and Win7 moving forward) for netbooks, and/or move to a services model for netbooks where they don't charge (much) for the Windows image itself. Given the netbook usage model and Microsoft's move towards cloud computing, this may not be a bad model for Microsoft if they execute well, but it's definitely a departure from their current business model.
Disclosure: no positions