By now, everyone has heard of the XO laptop (better known as the $100 laptop that costs $200) and the Eee PC. Both are examples of inexpensive ultra-mobile computers that run Linux. Although they both serve different purposes, they are technically similar in many ways. Another interesting aspect of these laptops (or at least the XO laptop) is that Microsoft is scared of them, and with good reason. The market for these inexpensive UMPCs is growing and already some of the best known devices run Linux. Right now, Linux has some significant advantages for use on this new class of computer including ease of customization, price, and minimal hardware requirements. On June 30, the minimal requirements argument will become even more compelling.

When June 30th comes, Microsoft will stop selling Windows XP. This leaves UMPC makers in a difficult position. Not only does Vista have all the problems of XP mentioned above, but it also requires even more expensive hardware. When you are trying to bring the price down to around $400 or even less, every dollar you can save on hardware is important and by discontinuing XP, Microsoft is increasing the gap between Linux and Windows in how much money must be spent on hardware. In this way, Microsoft is hitting themselves on the head in a market where they are already losing and they very much want to win.