Linux winning in the lower end market

From Tech Talk -

A very good analysis on why Linux is winning the OS war in the lower end market. It is significant since the lower end appears to have attracted several players, notably the OLPC, the Chinese Longmeng (Dream Dragon), and Intel's Classmate PC platform, with the ASUS Eee PC as an early model. All are basically affordable, bare-bone systems that allow users to surf the Net, do email, take notes, view photos, play MP3s - most things that people would do on a computer.

Unlike the traditional $1000 and upwards laptop which comes with Microsoft Windows or Vista pre-installed (and paid for), these inexpensive notebooks are in the sub $250 price range. Which means paying anywhere from $100 upwards just for the OS won't make any sense. Thus, the obvious choice is a Linux variant, which invariably means free.

So should Microsoft be worried? With the continued down spiraling of hardware prices, it will become more and more difficult for it to hide the OS cost within the system price. More significantly, it would not make sense for the low-cost units to use an OS that costs, at the minimum, almost half of the units' price. Furthermore, most of the units do not have traditional hard drives but rely on flash drives, typically around 2GB to 8GB. So how will Vista Home Basis, with a minimum 15GB requirement, fit? Neither do these units have the DVD or even CD-ROM drives.

It will be interesting to see what Microsoft will do to address this emerging trend.