Netbook market creates OS opportunities

Cash-strapped consumers and an economy in recession are bad news for sales of most products. This may not apply to netbooks, though. Several characteristics of the diminutive Web-oriented computers may actually work to their advantage in a depressed market.

"Netbook sales may not be adversely affected—in fact may actually be helped—by the recessionary pressures," said Philip Solis, ABI Research principal analyst. "There are three reasons for this. First, netbooks are a fairly new class of device, and widespread adoption has only recently begun. Second, they are relatively inexpensive, and some consumers may see them as a viable alternative to that pricey laptop they originally intended to buy. Finally, they can run inexpensive operating systems that don't require powerful hardware."

Three out of every four netbooks shipped last year ran Windows XP as their OS. That is changing. While much recent media attention has been focused on the trend to beef up netbooks and make them more laptop-like (and more expensive), the more important change has been at the lower end of this market. To create a lower-cost device, designers are turning to Linux, and for netbooks with ARM processors, to any of several mobile device operating systems such as Android.

Mobile operating systems such as Android, Windows Mobile and Maemo can still provide the core functionality required of a netbook, but at lower cost and with smaller storage and memory requirements.

"ABI Research believes that 2012 will see the tipping-point at which netbooks running Linux-based and mobile operating systems outnumber those running Windows XP. Device vendors, chipmakers and mobile operators can take some comfort from the fact that this trend should help expand the market even in a down economy," Solis said.