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Amid Cannibalization Woes, Netbooks Eat Into Microsoft Sale

Dec 08, 2008, 13:04 (1 Talkback[s])
(Other stories by Jessica Hodgson)

"Sales of netbooks, which have gained traction among budget-conscious computer buyers, have surged since the earliest versions launched around three years ago. Brokerage UBS estimates netbooks will account for 8% of the worldwide PC market next year, while research firm iSupply sees the little computers grabbing 12% by 2012.

"But most netbooks have less processing power than their full-featured cousins and can't run high-spec versions of Microsoft's Windows, the world's most-widely used operating system. Instead, the Redmond, Wash.-based software company is selling netbook makers lighter versions of its operating system at a cheaper price. Worse, some manufacturers are choosing to cut Microsoft out altogether by using Linux, an open-source OS.

"The risk posed by netbooks is just one in a series of cannibalization threats faced by Microsoft, the world's largest software company, that is already starting to weigh on the company's revenue growth."

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