The Netbook Effect - Great Read

From the guys/gals at Wired.com, a comprehensive look at where netbooks have been (and what they were born out of), where they are and where they are headed.

Here is an excerpt on OS:

Nearly every company in the PC industry has had its game plan uprooted by netbooks. Microsoft had intended to stop selling Windows XP this summer, driving customers to its more lucrative Vista operating system. But when Linux roared out of the gate on netbooks, Microsoft quickly backpedaled, extending XP for another two years—specifically for netbooks. Most experts guess that Redmond can charge barely $15 for XP on a netbook, less than a quarter of what it previously sold for. (Microsoft corporate vice president Brad Brooks assures me the company is earning "good money" on the devices and plans to make sure its next OS, Windows 7, can run on netbooks—Vista performs poorly on them.) For its part, Intel is selling millions of its low-power Atom chips to netbook manufacturers. "We see this as our next billion-dollar market," says Anil Nanduri, Intel's technical marketing manager—except that the company makes only a fraction of the money on an Atom chip as on a more powerful Celeron or Pentium in a full-size laptop.

And the closing argument is a little on the fringe (at least for now) but interesting rhetoric any way...

Netbooks could drive production of even crazily cheaper, lighter-weight computers. "If everything you're doing is online, then the netbook becomes a screen with a radio chip. So why do you need a motherboard?" OLPC designer Mary Lou Jepsen says. "Especially if you want the batteries to last. Why not just make it a screen and a really cheap $2 to $5 radio chip?" The cloud is also probably going to get powerful in ways that now seem like fantasy. AMD is working on an experimental 3-D graphics server farm that would run high-end videogames, squirting a stream out to portable devices so you could play even the most outrageously lush games without a fancy onboard processor. Patrick Moorehead, AMD's vice president of marketing, recalls that in 2007 gamers had to buy special powerful desktop machines loaded with RAM and $600 graphics cards to play Crysis: "Now imagine you've got servers running Crysis and streaming it to an iPhone or a netbook, sending just the vectors that let you navigate the game."

Because this is the future of hardware. For a few users who need a high-performance device, PC makers will offer ever-more-blisteringly fast, water-cooled boxes with screens the size of your living room—at $2,000 a pop. For everyone else—lawyers looking for something to do on the train, women desperate for something that fits in their handbag—netbooks will dominate. It's the rise of the very small machines.