Wired magazine has a piece worth reading on how Netbooks became a force for incumbent PC and laptop vendors to reckon with over the last couple of years. As the article explains it, Asustek, a Taiwanese company that's the world's 7th largest notebook maker, was just trying to create an inexpensive laptop for the Chinese market:
"When Asustek launched the Eee PC in fall 2007, it sold out the entire
350,000-unit inventory in a few months. Eee PCs weren't bought by
people in poor countries but by middle-class consumers in western
Europe and the US, people who wanted a second laptop to carry in a
handbag for peeking at YouTube or Facebook wherever they were.
Soon the major PC brands—Dell, HP, Lenovo—were scrambling to catch up; by fall 2008, nearly every US computermaker had rushed a teensy $400 netbook to market..."
"...By the end of 2008, Asustek had sold 5 million netbooks, and other brands together had sold 10 million. (Europe in particular has gone mad for netbooks; sales there are eight times higher than in the US.) In a single year, netbooks had become 7 percent of the world's entire laptop market. Next year it will be 12 percent."
It's not the hardware vendors that are seeing their business models shaken and stirred, but also software giants like Microsoft, as ChannelWeb goes on to elaborate:
"All of this has
come on the heels of some fairly disappointing product introductions
Following the widespread non-adoption of its Windows Vista operating system in commercial settings, Microsoft couldn't have been pleased to see Linux-based netbooks like the Eee PC from Asus start to really take off. So the company did move relatively quickly to get Windows XP onto newer versions of the Eee PC and other netbooks.
The problem -- Windows XP Home for netbooks brings Microsoft only $32 per license from local OEMs, compared to $65 for the desktop version of Windows XP Home. And Microsoft is in a tricky position, because if it tries to charge too much for XP or for its upcoming Windows 7 SKU for netbooks, customers may opt for Ubuntu Linux configurations already available from many netbook manufacturers."
Indeed, Microsoft is going as far to restrict netbook vendors from shipping systems with more than 1GB of RAM in order to protect it's licensing model on regular laptops.
Given that Vista doesn't run well at all on netbooks, and XP is on it's way out, Microsoft is pulling out all the stops to get Windows 7 out the door by as early as April this year. The company has tried to make sure Windows 7 plays well on netbooks.
Both articles are well worth reading in full.