Linux's share of netbooks surging, not sagging, says analyst

Research firm's numbers contradict lower figures touted by Microsoft on Linux netbooks

Reports that the Linux netbook is dead or dying are incorrect, at least globally, according to an analyst firm.

Nearly one-third of the 35 million netbooks on track to ship this year will come with some variant of the free, open-source operating system, ABI Research said. The exact split is 32% Linux versus 68% Windows, said Jeff Orr, an analyst at ABI, which works out to about 11 million Linux netbooks this year.

That number contradicts third-party market figures, trumpeted by Microsoft, that showed Linux shipping on as few as 4% of U.S. netbooks.

"Just because you live in the United States, don't assume that everything is on Windows," Orr said.

Orr said Ubuntu is a popular choice on netbooks, though he declined to confirm that with any hard statistics.

As netbooks running the ARM processor become a major factor, Orr predicted Linux will overtake Windows on netbooks by 2013. That will be driven by consumers in less-developed countries buying Linux netbooks as their primary PCs, rather than North American consumers buying netbooks as secondary machines as predominates today.

While U.S. consumers sometimes appear to have a love-hate relationship with Windows, those non-U.S. consumers have less experience with Windows -- and thus less reliance, Orr said.

For emerging ARM-based netbooks, Orr suggested that Microsoft adopt the same strategy that it did last year to wrest away Linux's initial lead on the hot netbook market, which was to cut the price of Windows XP.

That could mean offering Windows Embedded CE or Windows Mobile, both of which already run on ARM, at a discount to netbook manufacturers, he said, in order to stave off platforms such as Google Inc.'s Android or Chrome OS, or the Intel Corp.-created Moblin.

"They need to get a play started now," he said.

In a statement, Microsoft maintained that "over 93% of worldwide small notebook PCs run Windows today.

"With the recent launch of Windows 7, we believe that trend will continue," the company said. Microsoft touted Windows Embedded CE 6.0 R3 for ARM, but declined to say whether it would cut its license price to win manufacturers.

Microsoft has also resisted calls to endorsements from ARM vendors, such as Nvidia Inc., whose Tegra chips run Windows CE for Microsoft's Zune player, and the purported ease and power of developing on Windows CE.

ABI said its 35 million shipment figure is a reaffirmation of an earlier forecast that itself was a slight tweak of its January forecast of 39 million netbook shipments in 2009.

"That seemed aggressive at the time, but it's happening, no doubt about it," Orr said.

The largest share of netbook sales is in the Asia-Pacific region, including Japan, Australia and New Zealand.

The only market that has failed to match earlier expectations, he said, is China, where inexpensive (US$250), no-name netbooks have not sold as well as predicted.

Only 17% of netbooks this year will be sold through mobile operators, with the vast majority being sold via retail, said Orr. Consumers have been reluctant to pay for expensive 3G data service contracts, which average $60 a month, since they mostly treat netbooks as secondary machines.

"Wi-Fi is good enough today," he said. That will change, he said, as more buyers get netbooks as their primary machine.

Two categories that ABI says were nearly dead are also either reviving or due for a comeback. Mobile Internet Devices (MIDs), which by ABI's definition include Nokia's N900 and Nokia's ill-fated N810 and exclude more full-featured portable devices, only had 30,000 shipments worldwide last year. That should grow to 1 million MIDs worldwide this year, Orr said.

Meanwhile, ultra-mobile PCs (UMPCs), which ABI defines as tiny, pricey laptops running full Windows, also crashed and burned this year as a category, with the closure of vendors like OQO Inc.

UMPCs could come back as thin-and-light notebooks running ultra-low-voltage processors such as Intel's CULV or AMD's Neo, he said. Those would ideally cost between $500 and $750, so as to slot themselves between netbooks and regular laptops, he said.

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