Netbooks – The Mouse That Roared?

As netbooks continue their meteroic rise to a strong place in the PC world, don’t underestimate their influence on OS development.

Like the proverbial flea on an elephant, netbooks will exert strong pressures on Microsoft to offer a Windows 7 version that will play nice on CPU stingy netbooks. Just as Vista comes in a number of flavors, so too will W7 – after all, in reality it’s son-of-Vista. While netbooks will account for a small portion of total PC sales (forecasts a few years out show something like 6-9% of total PCs), don’t discount that Microsoft is taking the netbook OS issue seriously.

If Linux plays better on netbooks, why do I have to use Linux on the road and Windows at home? This is the nightmare scenario for M$ – a hole in the OS dike that M$ can not plug.

Apparently Microsoft is looking for feedback from netbook owners on W7 as to how it plays on their machines. There is no way that all the Vista/W7 eye-candy is going to migrate to netbooks in a way that users will not feel like they’re stuck in digital mud. Yes, it may work but does it work in a way that’s not exacting a performance penalty? Tricky stuff, especially for a culture that works on the premise that “more is better”.

When you dominate a market, the strategy shifts to preserving dominance above all else. What can not be tolerated is somebody sneaking under the razor wire to infiltrate the compound. Defense at all costs!

But here is the issue – OEMs will not pay much for a netbook OS considering minimal hardware costs, nor will end users. If netbooks are in fact used for  just “the basics”, there is no doubt that Ubuntu will fill the bill nicely – for free. How does M$ price W7Lite to compete? Something like $10-20 per license seems about right (OEM price – consumer price maybe $100?).

Vista MSRP pricing right now ranges from $200 for Basic to $320 for Ultimate, with Basic lacking 14 features listed as available in Ultimate – most notably eye-candy Aero. What consumer is going to pay $200 retail for a W7 Basic upgrade from XP? And for what functionality?

So not only is the netbook flea biting the OS, it’s also creating a nasty itch on pricing.

My take-aways on all of this:

• If you already have XP, figure you can extend its life for at least another 3-4 years. If you REALLY want Vista/W7 eye-candy, there is software available to basically turn XP into W7 WITHOUT incurring all the CPU-hungry overhead in Vista/W7.

• If you wait 3-4 years, I figure Ubuntu will be LOTS more palatable than it is now, and for me it’s filling the bill almost 100% now.

• Don’t be surprised to see Microsoft’s profit margins erode as its monopoly position is pressured by netbooks, Ubuntu, the “cloud” and free software.
• And Apple is always in the wings, ready to pounce.