Amid Cannibalization Woes, Netbooks Eat Into Microsoft Sale

“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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