Windows XP was given a reprieve until 2010 as a result of computers like the OLPC XO. With millions of people who have never owned a computer it is a market Microsoft would like to capitalize on. Especially when it gives Linux the opportunity to grow their share.

There hasn’t been too much talk of OLPCs lately, especially with so many companies entering the low cost notebook market such as Intel’s Classmate PC.  This leaves netbooks as the lone beneficiary of the extended life of Windows XP.

Windows Vista currently has system requirements are too power hungry to be optimized for Atom, or Geode processors.  Vista is a brand and I’d imagine that there will be a flavor of Vista Embedded for smaller, less powerful computers.  It could even be an updated version of XP with a new name and it would acheive the goal of being able to say that millions of more people are using Vista.

The whole situation is bittersweet for Microsoft since the margin and profit is lower on XP than Vista.

Theregister reported:

Netbooks running Windows mean growth but relatively low income as they do not run money spinning versions of Windows, like Windows Vista Premium Edition. Microsoft said it was too early to say how much netbooks are cannibalizing traditional sales.

Microsoft and Intel must have been expecting people to keep pushing for faster, more expensive computers like when the Pentium 4 and AMD Athlon were fighting to show which processor was the fastest.  Now with many facing economic hardships, and most of what people do taking place “in the cloud” the need for top-of-the-line laptops has decreased.  For now, netbooks are attracting people to use Windows which is a good problem for Microsoft to have.

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2. Quicky: Analysts See Netbook Growth To Continue

3. Microsoft To Netbook Owners – “No More XP”

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5. Windows 7 Headed For Netbooks