http://www.theregister.co.uk/2009/03/02/gartner_2009_pc_declines/

“Gartner says that the average netbook cost $450 in the United States in the fourth quarter [of 2008], but that will drop to $399 by the end of [2009].”

If you go to dell.com right now and look at their Mini 9 systems with Ubuntu, they start at $249… Are we potentially looking at $199 Ubuntu systems by Christmas 2009?

“How does HP’s new ‘mi’ linux distro fit into the equation? Will we see more of this from the big PC makers and more of them ‘weaning’ themselves off of windows?”

HP’s Linux is just a somewhat modified version of Ubuntu, like Dell’s. What will probably happen for the present is that each OEM will take a fairly stable distro (usually Ubuntu, but Linpus (Fedora-based) for Acer) and do some customization/branding to make it ‘theirs’ (compare what OEMs do to Windows to a lesser degree).

The OEMs, especially the big ones, are not ready to ‘wean’ themselves off Windows, nor do they even really want to; however, they DO want:

- a bargaining chip in negotiations with MS
- to be able to offer something that isn’t Vista
- to have a ‘plan B’ in case Win7 is another dud or if the economy is still tanking

First, he hasn’t kept track of the Win7 versions:
http://en.wikipedia.org/wiki/Windows_7_editions#Other_editions
http://www.pcpro.co.uk/news/246562/windows-7-to-come-in-six-flavours.html
(there are altogether too many, and some things have changed from Vista)

Specifically, there can be no “chance to sell upgrades on software, e.g., Starter Edition to Home Basic, Home Basic to Home Premium” except in what Microsoft terms “emerging markets” (the only countries where 7HB will be offered). But there, Microsoft also has to strongly compete against pirated versions of Windows (see the eweek.com article previously linked above).

Also, as has been noted often, people don’t usually upgrade Windows other than by buying new machines; the vast majority of low-cost Windows 7 netbooks in Europe and North America will be sold with crippleware Starter and then remain there.

Second, if you push Win7 Home Premium on Netbooks, you’re going to need to ramp up the specs in order to get a machine that functions about as well as an XP system would, which will mean that the cost will go up to the point where you might as well get a low-end regular notebook.

Third, AFAIK, the way Dell sells their Ubuntu machines, there is no software support; thus Linux will still be cheaper than Windows.

Now, I suspect that starter will probably be sold to OEMs for not more than XP is going now (let’s say $20, max). That will make it acceptable for OEMs to use on netbooks in the $300-500 range, while Home Premium will be used on notebooks in the $400+ range. Linux systems will compete well on netbooks in the sub-$400 range (and would also do well on lower-end notebooks (e.g. sub-$600) if they were widely offered). Macs will still dominate the high-end ($1000+) range.