Windows XP takes on Linux in the netbook market (updated)

It appears that XP versions of netbooks are outselling Linux versions, at least at Asus. But by how much?

The day after the launch of the stylish S101 netbook in Taiwan, I had a brief interview with Jerry Shen, chief executive of Asus. I asked him what proportion of Eee PC netbook sales were Windows XP rather than Linux. Surprisingly, he told me. But he didn't tell me quite enough.

Shen -- who is keen on Linux -- said Asus had hoped sales of Eee PCs would be 50:50 between XP and Linux, but actually they were 60:40 in XP's favour. (I assume that's for this calendar year.) So far, around 4m have been sold, and the target is 5m for this year.

Linux got about 6 months start over XP, including four months this calendar year, so the market has swung XP's way. However, it's impossible to say where it will end up.

I asked several Asus staff about figures for returns, but none thought that more Linux machines were being returned to stores. This is not the case at MSI, where Andy Tung, the Director of US Sales, told Laptop magazine: "The return rate is at least four times higher for Linux netbooks than Windows XP netbooks." He said:

People would love to pay $299 or $399 but they don't know what they get until they open the box. They start playing around with Linux and start realizing that it's not what they are used to. They don't want to spend time to learn it so they bring it back to the store.

After trash-talking Microsoft and launching with a Linux netbook, Acer is also shipping XP, and that became its best seller at Amazon.com. (See Are netbooks a threat to Macs?)

Shen said Asus would ship 700,000 Eee PCs this month, of which 50,000 will be S101s.

Asus expects to sell around 6m notebooks this year, and 5m netbooks, for a grand total of about 11m units. This should put it in the year's Top 5 portable computer suppliers, along with HP, Acer, Dell, Toshiba and Lenovo. China's Lenovo, which sells ThinkPads, could be the one to drop out.

Asus's notebooks and netbooks are created by different divisions with different managers. The netbooks go up to models with 10 inch screens, which is where the notebooks start.

Update: Re Vista and the S101, Samson Hu, the Asus vice president in charge of the EPC Business Unit, says: "Microsoft thinks it will impact the notebook market, so they have asked us not to run Vista on it."