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Re: Microsoft Missing Netbook Growth as Linux Wins Sales

Rex Ballard wrote:
nessuno wrote:

<Quote> 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% higher.

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

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 PCe
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.

Vista has tanked, not the profit maker they originally thought of. With the downturn in the worldwide economic situation, going to faster, premium equipped PC's with a more expensive operating system goes against the economic times.

Even XP requires a resource rich environment, which performs not as sparkling as Linux on these upper end netbooks. It is definitely not suitable on the lower end netbooks, where a stripped down version of Linux such as GOS or Linpus shine.

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 retailer.

Not to mention also about $50 worth in personal firewall and antivirus. Yes, one can opt for a free one, but because of its susceptibility to virii and root kits, it is best one not take chances with but the best solutions. Even with those, functionality is reduced so one ends up with a subscription.

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.

Actually, the lite versions of Linux off hard disk are quick also. Thicker versions such as Ubuntu on my older Dell C600, 850 Mhz 512 MB laptop boot up quicker than Windows 2000, that it came bundled with.


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