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Intel's low-cost Atom processors will be at the core of inexpensive PCs. And inexpensive computers these days often come with Linux.
How do PC companies shave off the last hundred dollars or so to get to $299 or in some cases $199? Easy. They swap out Windows (pricey) for Linux (free).
Case in point: Home Depot, the home supply store, sells a Mirus-branded desktop with either Windows or Linux. Based on the same hardware, one model sells for $419, the other for $299. Can you guess which one is $299? That's a steep price cut--more than 25 percent--for the system with Linux. Inside the Mirius is a Celeron D 420, which lists for $34, the cheapest chip that Intel currently lists on its pricing Web site.
Linux-based PCs like this are prime real estate for Atom. Especially when reports this week cite the cheapest upcoming Atom processors (due in the second quarter) at below $30.
A likely high-profile candidate for Atom and Linux is the Eee PC. The Linux option allows resellers to keep offerings as cheap as possible. The current Eee PC at Newegg is priced at $349 with Linux and a Celeron M processor (the forerunner--from the standpoint of market positioning--to Atom).
Processors from Via Technologies also match up well with Linux operating systems such as gOS. Wal-Mart sells (online) an Everex gPC2 TC2512 desktop computer with a 1.5GHz Via C7-D Processor and Google-centric gOS for $199.
Though Atom-based computers with Linux will be targeted at emerging markets, the success of the Eee PC in mature markets like the U.S. and Japan means that there is pent-up demand for stripped-down but practical PCs. "In emerging markets it will be a first PC. In mature markets, it will be a second or third PC within a household," said Dean McCarron, founder and principal of Mercury Research. Also, an Atom-based desktop could potentially go on the back of a monitor that is used in point-of-sale applications, McCarron said.
And don't overlook Via's C7 or low-end versions of its upcoming Isaiah processor being paired with low-cost computers with a Linux option. The V7 is slated for HP's upcoming HP 2133 Mini-Note PC and Isaiah is expected to garner a number of design wins in both ultraportable notebooks and desktops.
Though the HP 2133 may not be the best example of a low-cost PC (it is expected to come with Windows Vista Business, hiking the price to almost $750), expect Linux-based "Netbooks" (Intel's self-described category for small, inexpensive notebooks) to be less expensive than this.