Netbooks have apparently caused Microsoft some concern, for a couple of reasons. Number one of course, they are introducing a lot of people to Linux, since up to 30% of netbooks currently shipping are shipping with some form of Linux. The second reason, they have put Microsoft in a position where they have to continue supporting Windows XP (XP Home to be precise) on large numbers of new machines past the date when they wanted to discourage or discontinue such support. Another, they eat into sales of other versions of Windows that would normally be selling on full-sized laptops:
Small laptops are becoming a big problem for Microsoft Corp.’s Windows business.
The devices, which usually cost less than $500, are the fastest-growing segment of the personal-computer industry â€” a trend that’s eating into Microsoft’s revenue. Windows sales fell short of forecasts last quarter and the company cut growth projections for the year, citing the lower revenue it gets from netbooks. When makers of the computers do use Windows, they often opt for older and cheaper versions of the software.
They managed to catch Microsoft off guard, with a Microsoft spokeswoman mentioning they didn’t even have a true netbook policy a year ago, and with Citigroup Inc and others estimating that netbooks will account for over 30% of PC Growth for 2008 alone, with a 60% growth rate by 2010 (close to 30 million units).
Windows 7 is discussed, with Microsoft Senior Vice President Jon DeVaan saying “People will be pleasantly surprised and excited…….We’ll do well on those kinds of machines.”