As demonstrated by the current price for a Dell Inspiron Mini 9, netbook prices are falling very quickly and they started out cheap from the beginning. These price drops are largely driven by improvements in hardware that make the hardware components cheaper, rather than the software getting less expensive, though.

This trend poses a problem for Microsoft, since they rely on a small bit of profit from everyone who buys a computer. As it stands, this chuck of the price is almost invisible next to the overall price, but as hardware gets cheaper that will not always be the case. What happens when the cost of Windows becomes half the price of the computer? People will begin to notice that price and OEMs will look for a way to get rid of it. How do you get rid of that cost? Linux.

For most people right now, the cost of Windows has little effect on the price of their machine, since Microsoft heavily disounts it. Microsoft can’t just keep discounting more and more, though. Eventually the “Microsoft tax” will be a big part of everyone’s next computer purchase. This will likely force manufacturers into searching for a cheaper solution, leading them to Linux.

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