On Nov 6, 11:02 am, "ness...@wigner.berkeley.edu"
> Small laptops are becoming a big problem for Microsoft Corp.'s Windows
> business.... Acer Inc. and Asustek Computer...are using the rival
> Linux software on about 30 percent of their low-cost notebooks.
Acer has been shipping about 30% Linux and 70% XP machines - but the
XP machines have hard drives and a cellular modem card that can be
used with any SIM. The XP machines are also priced about 20-30%
ASUS reports sales of more like 60% Linux to 40% XP because Retailers
can charge almost the same for both machines, but the cost on the XP
versions is substantially higher (more RAM, more storage, software)
which means far less profit on the XP machines.
> 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 typically
> opt for older and cheaper versions of the software.
> ``It's a real threat to Microsoft,'' said Dickie Chang, an analyst at
> research firm IDC in Taipei. ``It gives users a chance to see and try
> something new, showing them there is an alternative.''...
In countries where the Linux sub-notebooks are doing best, and are
widely used, there has been a trend toward more retailers carrying
machines with "No OS", which easily allows the installation of any
popular version of Linux in about 20-30 minutes. Vista laptops are
typically 3-5 times more expensive than the "No OS" machines which are
often sold with 1 gigabyte of RAM and a smaller hard drive..
> Linux, equipped in 30 percent to 40 percent of Eee PCs sold, will
> probably sustain a market share of about 30 percent, said Samson Hu, a
> general manager at Asustek. The company estimates it will ship at
> least 5 million Eee PCs in 2008 after selling about 4 million since
> the product's debut....
There is the possibility that, eventually, the laptop market could
grow to 30% Linux (sold as No OS).
> Microsoft cut projection for Windows growth for the rest of the year
> to as little as 2 percent, below a previous forecast of 9 percent to
> 10 percent, after sales from PC versions of Windows grew less than the
> company had estimated last quarter....
Microsoft seems to have a negative cash flow. Even though they claim
that their revenues and profits are up, their balance sheet shows a
decrease in assets and an increase in liabilities. Microsoft may be
funding their own channels.
> Equipping Linux on a computer costs about $5, compared with $40 to $50
> for XP and about $100 for Vista, according to estimates by Jenny Lai,
> a Taipei-based analyst at CLSA Ltd.
Actually, the XP version typically requires about $100 worth of
additional hardware, specifically RAM and hard drive. This tends to
either increase prices to the consumer or decrease profit to the
> To cut costs, computer makers such as Acer and Asustek opted for
> slower processors and less memory. On these systems, Linux can boot up
> twice as fast as XP, according to Acer's Web Site.
Actually, it's even faster that that. The Linux versions boot from
flash ram, which means that it takes about 30 second to go from no
power to a fully functional system. The XP version will bring up a
"desktop" in about 90 seconds, but it can take 3-5 minutes before the
system is fully functional.
> ``The engineers designing computers understand that if they want to
> cut costs, the only way to do so is to get rid of Microsoft,'' IDC's
> Chang said.
One of the key factors in the OLPC/Sub-Notebook design is the
assumption that Linux would be the primary operating system rather
than Windows. This lowered the hardware requirements and made it
possible to cut costs as much as 70% compared to a fully functional
Windows XP Professional laptop running a full version of Microsoft
In order to capture a piece of the OLPC market, Microsoft offered the
OEMs a stripped down version of XP home edition and a stripped down
version of Microsoft Works. Even then, it was usually necessary to
add a hard drive to handle the storage requirements of the larger
system, and an extra 1/2 gig of RAM to get performance comparable to
the Linux version.
ASUS set the MSRP of the Linux versions much higher, so that retailers
could get more profit from the Linux versions of the machine which
retails for about %50-80 less than the Windows version. As a result,
retailers are taking the time to study the ASUS Linux environment and
can present it effectively to retail customers. As a result, ASUS
Linux machinse now make up about 60% of their sub-notebook market.
Acer has simply put a $100-$150 price difference between the Linux
version and the Windows XP versien. The larger display and keyboard
make it attractive compared to the ASUS, but the Linux version is a
bit more of a challenge to configure if you want to add features like
a USB cellular modem. On the other hand, the Linux version appears to
have many more applications and more robust applications.